FBC’s income grows 14pct

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FBC Holdings (FBC) this week said its income grew by 14 percent to $8,1 billion during the year ended December 31, 2020, driven by currency revaluations and a growth in lending.
Despite what the financial services group’s chairman, Herbert Nkala, described as a challenging year, it managed to post a profit of $1,5 billion, compared to a loss of $1,6 billion in 2019.

“Whilst foreign currency revaluation gains contributed significantly to the group’s reported total income, our lending operations managed to record modest growth, as a result of a combination of loan growth and repricing despite the prevailing macro-economic challenges,” Nkala said.

“Consequently, net interest income was 20 percent higher, with $1,7 billion being achieved during the period under review against $1,4 billion recorded last year mainly as a result of a marked slowdown in the volume of transactions, in line with reduced economic activity induced by the Covid-19 pandemic lockdown measures.”

He said the repricing of the revenue stream, implemented during the year, was inadequate to counterbalance a decrease in volume transactions.
“The insurance business recorded a decrease of five percent in net insurance premium to $845 million from $886 million achieved last year.
“The significant decrease in insurance premium revenues of 21 percent was offset by an improvement in premium ceded to reinsurers and retrocessionaires of 44 percent,” Nkala said.

The chairman noted that the combined effects of the Covid-19 pandemic lockdown and the hyperinflationary environment during the year had an initial negative effect on the insurance industry at large.

“This however, took a positive turn when the regulatory authorities subsequently permitted the underwriting of insurance policies in foreign currency,” Nkala said.
The group’s administration expenses increased by 16 percent to $4,5 billion from $3,9 billion reported in 2019, which was attributed to the repricing of expenses to match the inflationary environment.

The cost to income ratio excluding the monetary loss remained static at 64 percent. The monetary loss was reported to have improved to $1,4 billion from $1,8 billion, following the slowing down of inflation and an improvement in the hedging of monetary assets.
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