Offshore credit lines lift FCB

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FIRST Capital Bank (FCB) says it will continue to prioritise the creation of offshore lines of credit in the short-term to give impetus to the balance sheet growth and mitigate downside risks associated with the tight liquidity regime.

This comes as the regulatory authorities have been implementing measures for liquidity sterilisation to contain money supply growth.
The measures include a hike in statutory reserve ratios for both the US dollar and local currency, an aggressive mopping up of excess Zim dollar liquidity into non-negotiable certificates of deposit and a high interest rate regime, which was maintained for Zim dollar borrowings.
“The tightening of liquidity directly resulted in a slowdown in asset creation activities with credit risk becoming more prominent across the banking sector,” FCB company secretary, Sarudzai Binha said in a trading update.