FBC Holdings (FBC) has credited the introduction of the ZWG for going some way in easing inflation and exchange rate stability on the back of ZWG6, 69 mln operational profits recorded in the half-year period to June 30 2024.
The ZWG was enacted on April 5 2024 with a new Reserve Bank of Zimbabwe exchequer describing it as the country's lasting solution to currency problems.
Presenting the group's half-year results, FBC chairman, Herbert Nkala credited the new unit for easing volatilities.
"The introduction of the ZWG was supported by other notable measures which include the payment of taxes in local currency aimed at promoting its usage, an increase in statutory reserves for foreign currencies by 15-20%, and a reduction in the bank policy rate from 130% to 20%.
"These measures saw the exchange rate stabilizing and weighted monthly inflation slowing down to -0.2% in June 2024," he said.
The local unit has faced headwinds on the parallel market lately but through interventions made by the Central Bank for most part of the month of September 2024, authorities are optimistic of stability in the coming months.
Meanwhile, during the period, FBC's operating income for the period was ZWG 688 million compared to ZWG 1.14 billion for the comparative period.
Fees and commission income remained flat while there was a reduction in net interest income from ZWG 126 million to ZWG 74 million. The reduction in interest income largely reflects the recalibration of the local currency loan book to the new ZWG currency and attendant.
Total assets closed the period at ZWG 3.5 billion, down from ZWG 3.9 billion for the comparative period. The reduction in assets is largely attributable to a reduction in the value of some of our investment properties. Activity in the banking book during the first half of the year was hampered by the volatile environment in the first quarter.
"The group will continue to forge ahead with implementation of its strategy despite any headwinds. Our focus will remain on sustainability and strengthening client and stakeholder engagement. Fundraising initiatives will also be prioritized to ensure we can meet the evolving financial needs of our clients," added Nkala.
