First Capital Bank secures new lines of credit, US$20 million from Afreximbank

First Capital Bank (FCB) secured new lines of credit from the African Export-Import Bank (Afreximbank) for a total of USD 20 million.

This comes after the bank successfully utilised a EUR12.5 million line of credit from the European Investment Bank (EIB).

This is contained in the bank’s audited financial results for the year ended December 31, 2023.

The new lines of credit are expected to provide much-needed capital relief to medium-sized businesses in Zimbabwe. FCB reports that 81% of the EIB credit line has already been drawn down.

The Afreximbank credit line has also seen USD 6 million utilised so far.

The bank says it is also in talks with the African Development Bank and Trade Development Bank for additional lines of credit. These new partnerships aim to further support business growth in Zimbabwe.

“The Bank continues to engage various financiers for additional lines of credit with African Development Bank and Trade Development Bank at varying stages,” the bank said.

The bank has also unveiled a series of new initiatives aimed at improving customer experience and driving business growth.

“We continue to unlock the extensive capabilities of our core banking system to realise value for our stakeholders.

“Our aim is to reduce cost-to-serve and also bring transactional convenience through continuous innovations and smart partnerships with global brands,” the company said.

FCB highlighted the enhancements made to existing platforms such as USSD upgrade, mobile tax payments, and USD point-of-sale acquiring. They have also introduced new security features and established partnerships with companies like Emirates.

The bank launched several new products throughout the year, including accounts for sole traders, low-cost accounts, and a host-to-host payments platform designed specifically for businesses. They also expanded their USD savings options for both individual and group accounts.

FCB acknowledged the challenging economic environment in Zimbabwe, particularly the significant depreciation of the local currency.

“The first half of the year exhibited increased volatility in the exchange rate,” the bank noted.

“The authorities maintained a tight monetary policy throughout the period to counteract inflationary pressures.”

Despite the economic hardship, FCB reported a consolidated adjusted profit after tax of US$15.4 million for the year.

The growth was attributed to a 33% increase in total income, driven by customer base expansion, increased lending activity, and a rise in USD transactions.

The bank also benefited from foreign exchange gains through active currency management.

While operating expenses increased by 55% compared to 2022, FCB said it is actively working to manage their cost base. The bank also reported an increase in the loan loss ratio, primarily within the agriculture sector.