First Capital Bank (FCB) first-half (H1) profit has jumped by 300 percent to K50.5 billion from K16.7 billion in June 2024 and analysts have attributed the growth to interest income from government securities.
The six-month profit is also higher than the bank’s annual profit in 2024 recorded at K44.9 billion and money market analysts say this is an indication that the FMB Capital Holdings (FMBCH) plc local subsidiary continues to anchor the group’s profitability.
The financial results jointly signed by FCB chief executive officer Agness Jazza, chief finance officer Michael Kadumbo and director Hitesh Anadkat show that interest income almost doubled to K74.7 billion from the previous year’s K40 billion while non-interest income grew to K43.3 billion from the previous year’s K21.4 billion.
Comparing the results in comparison with other FMB Capital Holdings subsidiaries in Zambia, Botswana, Zimbabwe and Mozambique, experts believe the Malawi business remains the anchor of the group’s growth.
They say this is positively impacting share value of the group on the 16-counter Malawi Stock Exchange (MSE).
In an interview, financial analyst Brian Kampanje said: “This is definitely a good performance of the local subsidiary showcasing its ability to fully utilise the government securities to earn more interest income with relatively low risks.
“First Capital Bank remains an anchor of FMBCH plc despite operating in a tough economic environment. It can grow substantially if it can link traders in the Southern African Development Community region to enhance their trade partnerships.”
Kampanje said the overall impact of the bank’s performance in view of the country’s hyperinflationary environment will be known in the consolidated interim financial statements of the group.
In a separate interview, Stockbrokers Malawi Limited equity investment analyst Kondwani Makwakwa said the bank’s strong results in the first half gives investors more confidence in the group’s overall earnings.
“This has helped push up FMBCH’s share price, making it one of the best performers on the MSE.
“Investors are now expecting even better results for the full year, which is improving market confidence and how the company is valued,” he said.
Makwakwa said the bank’s higher profits also mean more tax revenue to the government.
Meanwhile, stock market investor Purity Chitalo has said the company’s strong results, which started last year, have resulted in soaring share value, now trading at K1 400 from K555 at the beginning of this year.
He said: “FMBCH plc is one of the outstanding counters, whose share price has seen a sharp rise, almost tripling to K1 400 during the first half.
“It remains attractive to its current and potential investors following the 17 percent growth in dividend pay-outs and since its 36 percent return on equity it recorded by June 2024, which started attracting more investors.”
Chitalo, who is also Minority Shareholders Association of Listed Companies Central Region chairperson, said the group’s regional approach strategy has helped to offset certain risks in other economies with strengths.
FMBCH consolidated profit in 2024 was recorded at $103 million (about K181 billion) from $91.7 million (about K167 billion) in 2023 led by Malawi at $27 million (about K47 billion) followed by Mozambique at $26 million (about K46 billion), Botswana $24 million (about K42 billion), Zimbabwe $23 million (about K40 billion) and Zambia at $7 million (about K12 billion).
