FBC closes in on $90m loan

Mr Mushayavanhu

Mr Mushayavanhu

FBC Holdings is close to securing a $90 million loan facility for its banking division FBC Bank, which is a follow-on to a previous $60 million facility, group CEO Mr John Mushayavanhu has said.

The CEO told analysts today that the $60 million syndicated loan facility that FBC Bank secured in 2014 was maturing in July and would be repaid expediently, and that the group had already moved to secure a successor facility.

“Once we pay the $60 million syndicated loan facility, we are actually going to get a successor facility of $90 million and the term sheets have already been processed,” he said.

He said the facility will largely benefit exporters.

“This is going mostly to be pre or post-shipment financing because we need to manage the nostro risk. If you are going borrow offshore, you must also lend to someone who is generating forex so that you don’t expose yourself to foreign currency exposure.”

The $60 million three-year term syndicated loan facility, which is now reaching maturity was jointly arranged by Standard Chartered Bank, Commerzbank Aktiengesellschaft and Investec Asset Management Proprietary Limited.

The facility carried a comprehensive guarantee from African Export-Import Bank and was structured to support trade, manufacturing and key projects in the economy.

“That facility is maturing in July . . . July 14 to be precise. The people we loaned out that money to have repaid and that has contributed to lower the lower non-performing loans (NPLs) ratio . . . ,” said Mr Mushayavanhu.

He highlighted that the bank’s NPLs had declined in the year to December 31, 2016, and that in addition to the maturing of the $60 million facility, other contributing factors to the improved NPL ratio were a cautious approach to lending and significant write-offs that the bank had made during the period under review.

In respect of financial performance for the year just ended, the group’s profit after tax rose 21 percent to $21,9 million compared to $18,1 million previously, on the back of a 14 percent improvement in the group’s total income, which jumped to $93 million from $81,9 million in the prior comparable period.

The growth in total income was underpinned by a 22 percent rise in net interest income from $36,6 million to $44,8 million and a net fee and commission income growth of 24 percent from $20,9 million to $25,9 million

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