Farai Mabeza, Senior Staff Writer 
FIRST Capital Bank (FCB) says it seeks to diversify its loan portfolio, which saw significant growth in agriculture lending last year, to ward off risk.
The bank is also targeting new credit lines worth US$90 million.
FCB managing director Ciaran McSharry told The Financial Gazette after an analyst briefing that there were other areas with potential for growth besides agriculture.
“We have a broad cross-sector portfolio of loans but the biggest growth in the last year has been in the agriculture sector. Its share of the portfolio has grown from 16 to 21 percent. But in a couple of areas we are not as big as we would like but we will continue to focus on those. Some of those are mining and energy. Those are the areas where there are opportunities in the future,” McSharry said.
The group posted a 42 percent increase in total income, growing from $25,9 billion in 2021 to $36,7 billion in 2022.
“We have a reputation for coming up with solutions for customers (in the agriculture sector) and how we can help them to grow their businesses and let’s be honest, agriculture is probably one of the most critical parts of this economy at the moment so the demand for investment is huge,” he explained.
“If we have the right lines of credit and the right volumes coming in, I would like to diversify the loan book even more and be a widespread and diversified organisation. You don’t want to be concentrated in one or two sectors. That’s where risk comes in.”
McSharry said the bank would seek to protect the balance sheet from inflation through a number of strategies such as deepening market intensity in underlying business, leveraging digital capabilities and robust relationship management.
“We will increase focus on foreign currency denominated business supported by own deposits, lines of credit and offshore facilities; target lines of credit of US$90 million from four offshore funders.
“We will increase investment in physical assets; acquisition of banking properties, construction of a new head office. Investment in FCY denominated short-term instruments such as gold coins,” he said.
“Consumer lending business is something we are looking at focusing on, focusing mainly on civil servants. Also, we look to restructure the business, are we right-sized, are we optimally structured for the environment. We have to continually look at our business. Have we got the right skills? Have we got the right people? ”
“Increased presence of physical banking operations, we are looking at high potential locations. I won’t go into details but we will be looking at where we can expand in that area.”
McSharry also touched on the closure of Kingdom Hotel in Victoria Falls, which is part owned by the bank.
“This is a joint venture that is owned 50 percent by us and 50 percent by a pension fund and we are in a transitionary stage at the moment. While the previous tenant has exited the building, we are going through various assessments of that hotel, what work needs to be done, what capital investments need to be made. We are looking at potential future partners,” he said.
“We aim to keep that closure as short as possible, recognising the value of that asset to Victoria Falls and the country.”
He added that the bank expected to be on the Victoria Falls Stock Exchange by the end of Q2 as he expressed guarded optimism about the outlook.
“It’s an election year so if we can maintain stability as we go forward I am positive about the outlook,” he said.
The group posted a 42 percent increase in total income, growing from $25,9 billion in 2021 to $36,7 billion in 2022.
This was on the back of broad-based performance improvement across all revenue lines.
A profit after tax of $8,4 billion was posted, representing a 27 percent reduction from $11,5 billion achieved in 2021.
However, operating profit excluding the impact of property valuations increased by 57 percent.
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