First Bank is in very good shape


First Banking Corporation, one of the indigenous banks that had been blacklisted by established financial institutions at the beginning of the year as the liquidity crunch hit the financial sector, says it is in a sound financial position.

It says whilst every financial institution experienced a degree of liquidity stress when the central bank announced its new monetary policy, it held its own without resorting to the Troubled Banks Fund set up by the Reserve Bank of Zimbabwe to bail out troubled banks.

The bank says the monetary policy had positive effects on the economy with the Zimbabwe dollar gaining 40 percent against the United States dollar.

According to its results for the year ending December, the bank had interest income of $54.6 billion up from $6.5 billion but net interest income only increased from $2.2 billion to $3.2 billion.

Dealing profits shot up from $86 million to $951 million.

The biggest gain was in fee and commission income. It rocketed from $2.3 billion to $33 billion.

Market analysts say this surge was the result of an influx of bank charges introduced on cash and cheque transactions last year during the cash crisis when most people were forced to obtain bank cheques to settle bills.

Total income increased from $4.7 billion to $38.2 billion with net income at $15.1 billion, up from $1.5 billion.

The bank says it believes there is a lot of unrealised potential in retail banking because of the size and age profile of Zimbabwe’s population. It is therefore continuing to invest in this sector and has become a member of Zimswitch to give its customers access to hundreds of ATM’s and Points-of-Sale countrywide.

It has opened an agency at the Harare International Airport and has relocated the Victoria Falls Branch. The Masvingo branch should be opened in the second quarter.

The bank says it is repositioning itself for organic growth and will consider acquisitions and mergers that arise.

It says while national economic fundamentals may be cause for a fair amount of pessimism, this is sometimes overdone.

“We do live in uncertain times but the recently announced monetary policy has boosted confidence and augurs well for the future. Our business is in very good shape and we believe that we have a thorough understanding of our core business,” it says.

The bank says it is now working on increasing its capital base to the $10 billion required by the central bank.

The central bank raised capital requirements for banks from $500 million to $10 billion and said all banks must comply with the new regulations by 30 September.


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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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