FBCH group recorded an outstanding pre tax profit of $6m for the full year ended December 31, 2009. The commendable performance came on the back of a near nil/zero position following the impairment of the group’s financial assets at adoption of multi-currency in January 2009.

 

Adoption of multi-currency at the beginning of the year brought its own new challenges that inter-alia included severe liquidity constraints in the economy, a dysfunctional inter-bank market, absence of the lender of last resort and limited access to international lines of credit.  During the course of the year, the group through the bank acquired 59% of ZSE listed Turnall Holdings following realization of collateral on a non-performing debt. The entity contributed significantly to the group’s bottom line.

Total income amounted to $30.4m, the main flagship (Bank), contributing 44% at $13.5m. Net interest income amounted to $5.3m with net fees and commissions coming in at a modest $3.6m. Other non-funded income totaled $21.6m. The group’s cost to income ratio remained in the high at 80%, signifying cost pressures against constrained business activity particularly during the first half year.  Segment contribution towards operating profit before tax was as follows; Bank $1.2m, Re-insurance $665 000, Turnall $1m, the Building society and Stock-broking providing just about $60000.00. Total Profit after tax was $5.2m translating to an EPS of 1.3c per share. During the course of year the bank fell prey to a spat of robberies and fraud that hit the country and consequently lost $1.4m which has since been accounted for in the group’s results, however recovery of the lost funds is estimated at $1.1m. Capital adequacy ratio for the Bank stood at 35%, while the building society was at 95% signifying enormous margin to sweat the assets.

The banks’ total deposits were $95m claiming 7.4% of total market share and had heaved by an astonishing 68% for the three months to March 2010, with over 70000 active accounts. Advances to clients summed up to $22m, a conservative loans to deposit ratio of 23%. Total assets and shareholders’ funds continued to grow from $76.9m and $28.2m at half year to $164m and $49.8m respectively at full year. Net asset value as at December 31, 2009 was 10.4c.

In the outlook the group expects to contain expenditure/costs growth through promotion of e-commerce. The recently witnessed growth in deposits is expected to cascade into an increase in advances to customers, and a subsequent increase in interest income for year 2010. Afreximbank has extended a $15m line of credit, which is expected to be advanced to industry for re-tooling and increasing capacity utilization. The Re-insurance and the Building society are set to be re-capitalized soon as the two entities seek to underwrite greater business and venture full time into foreign business and actively partake in the recently re-introduced 10 year mortgage finance respectively.  All the group’s subsidiaries remain adequately capitalized and in compliance with regulatory requirements.