FCA - VX 2023 HY Results Audit Review 2 Files Merged

AUDITED RESULTS
FOR THE YEAR ENDED 31

DECEMBER 2022
REVIEWED
FINANCIAL
RESULTS
FOR THE PERIOD ENDED 30 JUNE 2023
Chairman’s Statement Managing Director’s Report

Operating Environment Further to the listing on the Victoria falls Stock Exchange the Bank’s performance is The Bank posted an adjusted profit of US$9,04m for the 6 months to June 2023, barring
The global economic growth is expected to remain weak amid rising interest rates, sustained presented in United States Dollars (USD) following a change in functional currency the impact of the change in functional currency. This was supported by income growth
inflationary pressures and climate change effects. Continuing global geo-political tensions, effected from 1 January 2023. The change of functional currency has been applied over the period, at US$32.2m. This growth was driven by an improvement in the underlying
weakening global demand and tighter monetary and fiscal policies are further contributing prospectively with comparative figures being translated from the reported inflation business, with net interest income and net fees and commissions having increased by 35%
factors. Global economic growth is projected to fall from 3.5% in 2022 to between 2.3% and adjusted numbers using the closing rates applicable for those prior year periods. and 23% respectively.
2.9% in 2023 going into 2024. Global inflation, on the other hand, is expected to decline from
7.5% in 2022 to 5.3%. This remains above long-term averages with the trend having been Due to the change in functional currency certain technical accounting valuation Operating expenses increased by 22% from US$16.6m in the first half of 2022 to
observed also in developing countries. adjustments that have been included in the Statement of Profit & Loss and Other US$20.3m in the period under review. This resulted in the cost to income ratio moving
Comprehensive Income represent an adjustment to the reduction of fair values of from 58% in June 2022 to 63% in June 2023. The Bank continues to actively pursue cost
In Zimbabwe, the annual blended inflation rate declined from 105.5% in December 2022 to assets from those achieved by the simple application of the official exchange rate optimisation strategies to manage the overall cost base.
75.2% in April 2023, before jumping to 175.8 percent in June2023. The sharp rise in monthly to those values determined through the application of valuation principles using
inflation came against the backdrop of soaring prices of basic commodities in the wake of rapid USD inputs applicable at the time of reporting the 2022 financial results. These are The adjusted total comprehensive income for the period, amounted to US$8.2m for the
local currency depreciation. Following interventions by monetary and fiscal authorities, month- accounting adjustments and there is no material change in the underlying USD 6 months to June 2023, 43% lower than the US$14.4m total comprehensive income
on-month blended inflation receded to minus 15 percent in July 2023. valuations. reported for the corresponding period in 2022.
Change in Functional Currency A view on the adjusted outturn excluding the impact of the ‘day-one adjustments’ Lines of Credit
Following the listing on the Victoria Falls Stock Exchange (VFEX) on the 19th of May 2023, the related to the change in functional currency is as follows: The EUR12.5 million European Investment Bank (EIB) line of credit was close to being fully
Bank adopted the United States Dollar (USD) as its functional and reporting currency in order drawn during the period under review providing significant capital relief to medium sized
to present its financial statements in a currency that is indicative of the primary economic June 2023 June 2022 corporate customers. A further USD20 million line of credit has been mobilized with the
environment in which the Bank operates which also happens to be its reporting currency African Export-Import Bank (Afreximbank) and is now at drawdown stage.
on the VFEX. This is expected to simplify the results and make them more understandable
US$ 000 US$ 000
to stakeholders. The change in functional currency was tested against and satisfied the Accelerating Innovation
requirements of IAS 21: The Effects of changes in foreign Exchange Rates. Profit after tax as reported 4,277 1,288 Our investment in enhancing digital platforms puts us in good stead to position new
technology that supports our efforts to interact better with our customers, paying
Day 1 adjustments :
Regulatory reporting will continue to be rendered in accordance with extant guidelines. particular attention to convenience, efficiency, and increased security.
Investment in Joint venture 3,689 -
Earnings performance Investment Properties 1,079 - We have enhanced our Gold Card to enable it to transact on local USD point-of-sale
The Group’s adjusted operating profit (excluding share of profit/loss) from joint venture for the machines. Customers can now enjoy the convenience of transacting online, on Visa-
six months to 30 June 2023 amounted to US$9.02m, 51% higher than US$5.96m posted in the enabled ATMs and on POS machines across the world. Additionally, our POS Machines
corresponding period in the prior year. This earnings performance translates to an Earnings per Adjusted profit after tax 9,045
9,044 1,288 have been enabled to acquire USD transactions whilst integration with Ecocash and
share of US$0.20 cents for the period which was 233% higher compared to US$0.06 cents for OneMoney wallets for USD payments, providing customers the convenience of paying
the comparative prior year. This performance was underpinned by an increase in the customer Other comprehensive (loss)/income as reported (6,703) 13,091 directly from their wallet accounts.
base, growth in the loan book, and exchange gains.
Day 1 adjustments : Our partnership with Zimnat, our bancassurance partner has been enhanced to enable
Capitalization and liquidity Property plant & Equipment 4,414 - our customers to insure their vehicles and purchase vehicle licenses from all our branches
The rapid devaluation of the ZW$ exerted Investment securities 1,405 - countrywide. We will continue to look for ways to build this strategic alliance to ensure
pressure on capital resulting in the Bank’s US$ convenience for our customers.
denominated core capital decreasing marginally Adjusted other comprehensive (loss)/income (884) 13,091
by 2% to US$48m as of 30 June 2023 from Through our Small and Medium Enterprises (SME) Banking proposition, we continue
US$49m reported as at 31 December 2022. Total comprehensive (loss)/income as reported (2,426) 14,379 to offer unique banking solutions that are designed to help SMEs in scaling up their
This level is still above the regulatory operations. In the period under review, networking opportunities were created through
minimum of US$30m with a comfortable Day 1 adjustments : SME EXPOs and workshops to capacitate clients and help them leverage potential
margin of safety being maintained. The Investment in Joint venture 3,689 - partnership opportunities.
Bank’s capital adequacy ratio remained Investment Properties 1,079 -
strong, closing the period at 37% which Investing in the Future
is well above the regulatory minimum of Property plant & Equipment 4,414 - We remain committed to our promise to nurture and develop new talent for the Bank and
12%. With a liquid assets ratio of 49%, the Investment securities 1,405 - the country. A total of 10 graduate trainees and 14 university interns were recruited across
Bank carried a comfortable buffer above the Adjusted Total comprehensive income 8,160
8,161 14,379 various disciplines within the Bank and they have contributed exciting new innovative
regulatory minimum of 30% representing ideas for the betterment of our service to clients.
capacity to underwrite more business.
Impact on Earnings per share During the global money week 11,013 beneficiaries were equipped with financial skills. Of
Dividend Earnings per share as reported 0.20 0.06 these beneficiaries, 52 percent were females, drawn from all provinces across the country.
The Board has declared an interim dividend of More than 250 students also had the opportunity to experience a day’s work at the Bank
US0.14 cents per share. Adjusted Earnings per share 0.42 0.06 through a Job Shadow program. More than 25 schools participated with 57 percent
female students taking part, further reinforcing our deliberate approach to supporting
Appreciation the girl child.
I would like to extend my appreciation to all our valued The commentary below is based on the adjusted financial performance.
stakeholders for their unwavering support during the Victoria Falls Stock Exchange (VFEX) Listing
reporting period. Thank you to our valued clients who have Business performance First Capital Bank listed on the VFEX in May 2023, becoming the first bank to list on
continued to believe in us in a somewhat challenging The Reserve Bank of Zimbabwe maintained a tight monetary policy throughout the the bourse and the 13th counter overall. We anticipate that the listing on the stock
environment. I further extend my appreciation period to counteract resurgent inflationary pressure on the Zimbabwean Dollar exchange will unlock value for our shareholders as well as providing great opportunities
to my fellow directors, management, and (ZWL). These included the introduction of gold coins and gold backed digital tokens, for our investors. Furthermore, through the operation of a memorandum of agreement
staff for the resilient efforts that they an increase in the level of statutory reserves and more diligent application of non- executed with the VFEX the Bank has offered to lend its technical capacity in solutioning
continue to put in order to accelerate negotiable certificates of deposits on daily excess funds. These measures resulted for the deepening of capital markets. This includes providing custodial, clearing and
the achievement of our growth in relative exchange rate and price stability during the later part of the first half. settlement facilities for the different market opportunities in a safe and secure manner.
objectives. We are proud to be Broadly, liquidity supply during the period remained challenging across all currencies, Operationalization of envisaged solutions is in progress.
part of a regional institution that constraining asset expansion in the financial sector.
always puts customers at the Appreciation
centre of all that we do. The Bank’s total deposits turned out at US$109.5m on 30 June 2023 which is lower Our customers are at the core of our success. Their feedback has been invaluable, and as
than US$136.1m as of 31 December 2022. The reduction was largely driven by the loss a listening bank, we will continue to act on it, improve on service delivery and steer the
of value on ZWL denominated deposits following a 735% depreciation of the ZWL over bank to success.
the period. ZWL deposits constituted 8% of total deposits at 30 June 2023 compared
to 22% at 31 December 2022. USD denominated deposits increased by 6.6% during Our colleagues across the country remain the engine that drives our institution and I
the period under review. would like to take this opportunity to express my heartfelt thanks for their unwavering
commitment to service excellence.
Loans to customers increased by 23% over the same period to close at US$79.5m,
Patrick compared to US$65.9m as of 31 December 2022, with 95% of business having been Lastly, I would like to express my gratitude to the Board for their support and guidance
Devenish underwritten in USD as at June 2023. as we endeavor to remain steadfast on this growth trajectory. Belief indeed comes first.
(Chairman)
31 August 2023 Asset quality remained satisfactory, with a loan loss ratio of 3.3%. Exposures with
increased credit risk were largely within the agriculture portfolio. Whilst the overall
default risk increased , this was within the Bank’s appetite. Ciaran McSharry
(Managing Director)
31 August 2023
REVIEWED FINANCIAL RESULTS FOR THE PERIOD ENDED 30 JUNE 2023 1

AUDITED RESULTS

DECEMBER 2022
REVIEWED
FINANCIAL
RESULTS
Corporate Governance Report
The Board of Directors of First Capital Bank Limited (“the Board/ First Capital Bank”) is committed to and recognizes the importance of Directors induction and development
strong governance practices. The Board understands that a comprehensive corporate governance framework is vital in supporting executive Board conformance and performance is enhanced through continuous learning. As part of its learning program, the Board has in place a
management in its execution of strategy and in driving long term sustainable performance. In order to achieve good governance, the Board comprehensive induction plan for on-boarding new directors. Further, as part of continuing development, Board members attend director
subscribes to principles of international best practice in corporate governance as guided by, among others, the Banking Act [Chapter 24:20], training programs.
the Companies and Other Business Entities Act [Chapter 24:31], the Reserve Bank of Zimbabwe Corporate Governance Guideline No.1 of
2004, the Securities and Exchange (Zimbabwe Stock Exchange Listings Requirements) Rules, 2019 publised in Statutory Instrument 134 of Board and director evaluation
2019 and as ammended from time to time and the Zimbabwe National Code on Corporate Governance. The Board conducts an annual evaluation to assesses the performance and effectiveness of individual directors, the Board Chairman,
Committees and the overall performance of the Board. The process is facilitated by an external party to allow for objectivity. The evaluation
The Board continuously reviews its internal governance standards and practices, to ensure that it modifies and aligns them with local process involves directors completing evaluation questionnaires and having one on one meetings with the facilitator. The results of the
and international corporate governance requirements as appropriate. As part of its continuing efforts to achieve good governance, the evaluation are collated, a report is produced and feedback provided to the Board. The Board also submits the evaluation report to the
Board promotes the observance of the highest standards of corporate governance in First Capital Bank and ensures that this is supported Reserve Bank of Zimbabwe.
by the right culture, values, and behaviours from the top down to the lowest member of staff. First Capital Bank is committed to the
principles of fairness, accountability, responsibility, and transparency. To this end, the Board is accountable to its shareholders and all Board activities
its stakeholders including the Bank’s employees, customers, suppliers, regulatory authorities, and the community from which it operates The Board has delegated some of its duties and responsibilities to sub-committees to ensure the efficient discharge of the Board’s mandate.
through transparent and accurate disclosures. The ultimate responsibility of running the Bank however still remains with the Board. The subcommittees of the Board are regulated by
terms of reference which are reviewed every year or as and when necessary. The Committees meet at least once every quarter and are all
Board responsibilities chaired by Independent non-executive directors as detailed below.
The Board is responsible for setting the strategic direction of the Bank as well as determining the way in which specific governance matters
are approached and addressed, approving policies and plans that give effect to the strategy, overseeing and monitoring the implementation Board committees
of strategy by management and ensuring accountability through, among other means, adequate reporting and disclosures. The Board is
guided by the Board Charter in the execution of its mandate. The roles of the Board Chairman and that of the Managing Director are Audit Committee
separate and clearly defined. The Board ensures a division of responsibilities at all times to achieve a balance of authority and power so that The primary functions of the Committee are to oversee the financial management discipline of the Bank, review the Bank’s accounting
no one individual has unfettered decision making powers. policies, the contents of the financial reports, disclosure controls and procedures, management’s approach to internal controls, the
adequacy and scope of the external and internal audit functions, compliance with regulatory and financial reporting requirements, oversee
Board Chairman and non-executive directors the relationship with the Bank’s external auditors, as well as providing assurance to the Board that management’s control assurance
The Board of directors is led by an independent, non-executive Chairman, whose primary duties include providing leadership of the Board processes are being implemented and are complete and effective. At each meeting, the Committee reviews reported and noted weaknesses
and managing the business of the Board through setting its agenda, taking full account of issues and concerns of the Board, establishing and in controls and any deficiencies in systems and the remediation plans to address them. The Committee also monitors the ethical conduct
developing an effective working relationship with the executive directors, driving improvements in the performance of the Board and its of the Bank, its executives and senior officers and advises the Board as to whether the Bank is complying with the aims and objectives for
committees, assisting in the identification and recruitment of talent to the Board, managing performance appraisals for directors including which it has been established. During the period under review, there were no material losses as a result of internal control breakdowns.
oversight of the annual Board effectiveness review and proactively managing regulatory relationships in conjunction with management. In
addition, the non-executive directors proactively engage with the Bank’s management to challenge and improve strategy implementation, The committee is wholly comprised of independent non-executive directors. The members of the Committee as at 30 June 2023 were:-
counsel, and provide support to management and to test and challenge the implementation of controls, processes and policies which
enable risk to be effectively assessed and managed. A. Chinamo (Chairperson)
T. Moyo
The Chairman works together with the non-executive directors to ensure that there are effective checks and balances between executive K. Terry
management and the Board. The majority of the Board members are independent non-executive directors who provide the necessary
independence for the effective discharge of the Board’s duties and compliance with regulatory requirements Board Credit Committee
The Board Credit Committee is tasked with the overall review of the Bank’s lending policies. At each meeting, the Committee deliberates
Executive directors and considers loan applications beyond the discretionary limits of management. It ensures that there are effective procedures and resources
The executive management team is led by the Managing Director. Management’s role is to function as trustees of the shareholder’s capital. to identify and manage irregular or problem credit facilities, minimize credit loss and maximize recoveries. It also directs, monitors, reviews
Their main responsibilities include reporting to the Board on implementation of strategy, effectiveness of risk management and control and considers all issues that may materially impact on the present and future quality of the Bank’s credit risk management.
systems, business and financial performance, preparation of financial statements and on an ongoing basis, keeping the Board fully informed
of any material developments affecting the business.
The Committee comprises three non-executive directors. The members of the Committee as at 30 June 2023 were: -
Directors’ remuneration
The Board Human Resources and Nominations Committee sets the remuneration policy and approves the remuneration of the executive K. Terry (Chairperson)
directors and other senior executives as well as that of the non-executive directors. The remuneration package of executive directors includes H. Anadkat
a basic salary and a performance bonus which is paid based on the performance of the company as well as that of the individual. The Bank K. Naik
also has in place a share option scheme, meant to be a long-term retention incentive for employees.
Loans Review Committee
Board diversity This Committee has the overall responsibility for the complete review of the quality of the Bank’s loan portfolio to ensure that the lending
The First Capital Bank Board recognises the importance of diversity and inclusion in its decision making processes. The Board is made up of function conforms to sound lending policies and keeps the Board and management adequately informed on noted risks. It assists the
six independent non-executive directors, two non- executive directors and two executive directors. Three members of the Board (30%) are Board with discharging its responsibility to review the quality of the Bank’s loan portfolio. At every meeting, it reviews the quality of the
female. The Board members have an array of experience in commercial and retail banking, accounting, legal, corporate finance, marketing, loan portfolio with a view to ensuring compliance with the banking laws and regulations and all other applicable laws as well as internal
business administration, economics, human resources management and executive management. policies.
Access to information The Committee comprises three non-executive directors. The members of the Committee as at 30 June 2023 were: -
Openness and transparency are key enablers for the Board to discharge its mandate fully and effectively. The non-executive directors have
unrestricted access to all relevant records and information of the Bank as well as to management. Further, the Board is empowered to seek T. Moyo (Chairperson)
any professional advice or opinion it may require to allow for the proper discharge of its duties. A. Chinamo
S. Moyo
Share Dealings / Insider trading
The directors, management and staff of First Capital Bank are prohibited from dealing in the company’s shares whether directly or indirectly, Human Resources and Nominations Committee
during “closed periods” which are the periods that are a month before the end of the interim or full year reporting period until the time of The Human Resources and Nominations Committee assists the Board in the review of critical personnel issues and acts as a Remuneration
the publication of the interim or full year results. and Terminal Benefits Committee. The Committee reviews and approves overall recommendations on employee remuneration as well
as approving managerial appointments. The Committee ensures that the remuneration of directors is in line with the nature and size of
Further, directors, management and staff are prohibited from dealing in the company’s shares whenever the company is going through the operations of the Bank as well as the Banks performance. In addition, the Committee also considers nominations to the Board and
certain corporate actions or when they are in possession of non-public information that has the potential of impacting the share price of succession planning for the Board.
the company.
The Committee comprises three non-executive directors. The members of the Committee as at 30 June 2023 were: -
Communication with stakeholders
First Capital Bank communicates with its stakeholders through various platforms including the Annual General Meeting, analyst briefings, K. Naik (Chairperson)
town halls, press announcements of interim and full year financial results, notices to shareholders and stakeholders and annual reporting to P. Devenish
shareholders and stakeholders. The Board and management of First Capital Bank also actively engages regulatory authorities including the H. Anadkat
Reserve Bank of Zimbabwe, the Zimbabwe Stock Exchange, and the Deposit Protection Corporation on a regular basis to share updates on
material developments taking place in the Bank. Board Risk Committee
The Board Risk Committee is charged with the responsibility to oversee the Bank’s overall enterprise risk environment under three
Internal Audit broad areas of Operational Risk, Credit Risk Management and Market Risk. These are controlled and managed independently from risk-
First Capital Bank Internal Audit is an independent control function which supports the business by assessing how effectively risks are being taking functions and other committees of the Bank. The committee is responsible for the policies and procedures designed to monitor,
controlled and managed. It works closely with the business helping drive improvements in risk management. This is done through reviewing evaluate and respond to risk trends and risk levels across the Bank ensuring that they are kept within acceptable levels.
how thebusiness undertakes its processes as well as reviewing systems used by the business.The internal audit function reports its findings
to management and guides them in making positive changes to business processes, systems and the control environment. The Internal
Audit function also monitors progress to ensure that management effectively remediates any internal control weaknesses identified as The Committee comprises three non-executive directors. As at 30 June 2023 members of the committee were: -
quickly as possible.
S. N. Moyo (Chairperson)
The Head of Internal Audit reports directly to the Chairman of the Board Audit Committee and administratively to the Managing Director. A. Chinamo
M. Gursahani
Declaration of interest
The Board of First Capital Bank believes in the observance of ethical business values from the top to the bottom. To this end, the Board Board IT Committee
has in place a policy that manages conflict of interest including situational and transactional conflict. Directors disclose their interests on The Board IT Committee is a committee of the Board, established to have strategic oversight and governance of the Bank’s strategic
joining the Board and at every meeting of the directors they disclose any additional interests and confirm or update their declarations of investment in information technologies, data protection policies, cyber security, and information management systems.
interest accordingly.
The Committee comprises three non-executive directors. As at 30 June 2023, the Committee was made up of the following members:-
Ethics
In an endeavor to instill a culture of sound business ethics, all employees and directors are requested to attest to an Anti Bribery and K. Terry (Chairperson)
Corruption declaration which essentially seeks to ensure that our directors, management and staff observe the highest standards of T. Moyo
integrity in all their dealings and at all times. The Bank has a zero tolerance policy to bribery and corruption. In addition, the business has a M. Gursahani
whistle-blowing facility managed by Deloitte & Touche through which employees and other stakeholders can raise any concerns they may
have anonymously. Management operates through a number of committees including the Executive Committee, the Country Management Committee and the
Assets and Liabilities Committee. The Committees terms of reference are as below.

AUDITED RESULTS

DECEMBER 2022
REVIEWED
FINANCIAL
RESULTS
Ciaran McSharry Patrick Devenish

Managing Director Chairman
Kiritkumar Naik
Independent Hitesh Anadkat
Non-Executive Director Non-Executive Director
Kevin Terry
Independent Sara Nyaradzo Moyo
Non-Executive Director Independent
Tembiwe Moyo
Non-Executive Director
Acquilina Chinamo Independent
Independent Non-Executive Director
Fanuel Kapanje
Chief Finance Officer
Mahendra Gursahani
Risk committee
Executive Committee (EXCO) Name Total Meetings Present Absent
The Executive Committee receives its authority from the Board of First Capital Bank Limited. The Managing Director and the Executive S.N. Moyo 2 2 Nil
Committee are responsible for managing and overseeing all aspects of the Bank’s operations and functions, developing the strategy of A. Chinamo 2 2 Nil
the Bank and delivery of the annual business plan. The Executive Committee assists the Managing Director to manage the Bank, to guide M. Gursahani 2 2 Nil
and control the overall direction of the business of the Bank and acts as a medium of communication and co-ordination between business
units and the Board. The Committee delegates work and authority to management committees including but not limited to the Country IT Committee
Management Committee, Asset and Liability Management Committee, Enterprise Risk Management Committee, Management Credit Name Total Meetings Present Absent
Committee and other specialized Committees. The Committee comprises of executive directors and senior management. K. Terry 2 2 Nil
T. Moyo 2 2 Nil
M Gursahani 2 2 Nil
Country Management Committee (CMC)
The Country Management Committee is the operational management forum responsible for the delivery of the Bank’s operational plans Credit Committee
including implementation of operational plans, annual budgeting, and periodic review of strategic plans, as well as identification and Name Total Meetings Present Absent
management of key risks. The Committee shall be responsible for providing direction and oversight on operations across the business. The K. Terry 2 2 Nil
Committee assists the Managing Director in delivering the business mandate and in designing and assuring the adequacy and effectiveness H. Anadkat 2 2 Nil
of internal controls. The Committee derives its mandate from the Executive Committee. The Committee comprises of executive directors K Naik 2 2 Nil
and senior management.
Directors shareholding
Assets and Liabilities Committee (ALCO) The following is a schedule of the directors’ shareholdings in the Bank:
ALCO is tasked with ensuring the achievement of sustainable and stable profits within a framework of acceptable financial risks and 30.06.2023 31.12.2022
controls. The Committee ensures maximization of the value that can be generated from active management of the Bank’s balance sheet P. Devenish Nil Nil
and financial risk within agreed risk parameters. It manages the funding and investment of the Bank’s balance sheet, liquidity and cash flow, S. N. Moyo Nil Nil
as well as exposure of the Bank to interest rate, exchange rate, market and other related risks. It ensures that the Bank adopts the most T. Moyo Nil Nil
appropriate strategy in terms of the mix of assets and liabilities given its expectation of the future and potential consequences of interest H. Anadkat * 36,068,751 36,068,751
rate movements, liquidity constraints foreign exchange exposure and capital adequacy. It also ensures that strategies conform to the Bank’s K. Terry 111,951 111,951
risk appetite and level of exposure as determined by the Enterprise Risk Management Committee. The Committee comprises executive A. Chinamo Nil Nil
directors and heads of functions key to the proper discharge of the Committee’s responsibilities. K. Naik 25,000 25,000
C. McSharry Nil Nil
Board and Committees attendance 2023 F. Kapanje Nil Nil
Main Board M. Gursahani Nil Nil
Name Total Meetings Present Absent
*Mr Hitesh Anadkat also holds indirect interest in Afcarme Holdings Zimbabwe (Private) Limited, which in turn holds the majority
P. Devenish 3 3 Nil
shareholding in the Bank.
T. Moyo 3 3 Nil
S. Moyo 3 3 Nil
Half-year financial results
H. Anadkat 3 3 Nil
The Directors are responsible for the preparation and integrity of the financial results and related financial information contained in this
K. Terry 3 3 Nil
report. The financial statements which form the basis of these interim financial results are prepared in accordance with International
K. Naik 3 3 Nil
Financial Reporting Standards, particulalry IAS 34 Interim Financial Reporting and the Banking Act (Chapter 24:20). The interim financial
A. Chinamo 3 3 Nil
statements have been subjected to a review by the Bank’s external auditors and their review conclusion is appended. The interim financial
M Gursahani 3 3 Nil
C. McSharry 3 3 Nil statements have been prepared under the supervision of the Chief Finance Officer, Fanuel Kapanje, FCA(Z), RPAcc, PAAB Registration No
F. Kapanje 3 3 Nil 2295.
Audit committee Compliance

Name Total Meetings Present Absent The Board is of the view that the Bank materially complied with all relevant laws and regulations throughout the reporting period.
A. Chinamo 2 2 Nil
T. Moyo 2 2 Nil
K. Terry 2 2 Nil By Order of the Board
Human resources & nominations committee

Name Total Meetings Present Absent
K. Naik 2 2 Nil
P. Devenish 2 2 Nil
H. Anadkat 2 2 Nil Sarudzai Binha
Company Secretary
Loans review committee
Name Total Meetings Present Absent 31 August 2023
T. Moyo 2 2 Nil
A Chinamo 2 2 Nil
S.N. Moyo 2 2 Nil

AUDITED RESULTS

DECEMBER 2022
REVIEWED
FINANCIAL
RESULTS
Independent Auditors Review Conclusion

The financial results for the six months ended 30 June 2023 have been reviewed by the Bank’s external auditors, Deloitte and Touche. An Consolidated Statement of Financial Position
unmodified review conclusion has been issued on the financial results. The auditor’s review conclusion is appended to the Bank’s interim
as at 30 June 2023
financial results which are available for inspection at the Bank’s registered office and on the Bank and VFEX website.
Reviewed Audited and
The partner for the review engagement was Mr. Lawrence Nyajeka, PAAB practice certificate number 0598. translated*
30.06.2023 31.12.2022
Notes USD000 USD000
Assets
Consolidated Statement of Profit or Loss and Other Comprehensive Income Cash and bank balances 11 53,524 78,002
for the half year ended 30 June 2023 Derivative financial instruments 12 5 19
Reviewed Reviewed and Investment securities 13 16,079 19,243
translated* Loans and receivables from banks 14 4,409 328
30.06.2023 30.06.2022 Loans and advances to customers 15 79,535 65,973
Notes USD000 USD000 Other assets 16 8,153 11,643
Interest income 3 12,205 9,169
Investment properties 18 4,800 5,936
Interest expense 4 (598) (602)
Net interest income 11,607 8,567 Investment in joint venture 20 15,514 19,613
Net fee and commission income 5 11,513 9,368 Property and equipment 17 21,282 27,376
Net trading and foreign exchange income 6 9,789 9,983 Intangible assets 19 803 988
Net investment and other income 7 376 325 Right of use assets 21.1 2,876 3,262
Fair value (loss)/ gain on investment property (1,136) 131 Current tax asset - 1,560
Total non interest income 20,542 19,807 Total assets 206,980 233,943
Total income 32,149 28,374
Impairment losses on financial assets 8 (2,853) (942) Liabilities

Net operating income 29,296 27,432 Lease liabilities 21.2 2,977 2,653
Balances due to banks 22 12,515 1,165
Operating expenses 9 (20,276) (16,571) Deposits from customers 23 109,522 136,063
Employee benefit accruals 24 1,110 1,697
Net monetary loss - (4,893) Other liabilities 25 12,170 17,729
Share of (loss)/ profit from joint venture 20 (3,795) 505
Current tax liabilities 307 -
Profit before tax 5,225 6,473
Taxation 10 (948) (5,185) Balances due to group companies 34.3 2,108 69
Profit for the period 4,277 1,288 Deferred tax liabilities 27 3,791 6,662
Total liabilities 144,500 166,038
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
(Loss)/ gain on property revaluations (5,314) 11,310 Equity
Capital and reserves
Deferred tax 900 (70) Share capital 28.1 58 58
(Loss)/ gain on financial assets at fair value through other comprehensive income (2,361) 1,966 Share premium 28.1 6,360 6,360
Deferred tax 72 (115) Retained earnings 38,860 37,582
Net (loss)/ gain on other comprehensive income (6,703) 13,091 Non - distributable reserve 28.2 2,076 2,076
Fair value through other comprehensive income reserve 28.3 2,238 4,527
Total other comprehensive (loss)/ income (6,703) 13,091
Total comprehensive (loss)/ income (2,426) 14,379 Property revaluation reserve 28.4 12,368 16,782
General reserve 28.5 185 185
Earnings per Share Share - based payment reserve 28.6 335 335
Basic (cents per share) 0.20 0.06 Total equity 62,480 67,905
Diluted (cents per share) 0.20 0.06
* Comparative figures for the six months ended 30.06.2022 which were presented in Zimbabwean dollars have been translated to United Total equity and liabilities 206,980 233,943
States Dollars by application of the closing official rate at the reporting date.
* Comparative figures as at 31.12.2022 which were presented in Zimbabwean dollars have been translated to United States Dollars by
application of the closing official rate at the reporting date.
Consolidated Statement of Changes in Equity

for the half year ended 30 June 2023
Fair value
Non- through other Property Share-based
Share Share Retained distributable comprehensive revaluation General payment
capital premium earnings reserves income reserves reserve reserve Total equity
USD000 USD000 USD000 USD000 USD000 USD000 USD000 USD000 USD000
Balance at 1 January 2023 58 6,360 37,585 2,076 4,527 16,782 185 335 67,908
Profit for the period - - 4,277 - - - - - 4,277
Other comprehensive loss for the period - - - - (2,289) (4,414) - - (6,703)
Total comprehensive income for the period - - 4,277 - (2,289) (4,414) - - (2,426)
Dividends paid - - (3,002) - - - - - (3,002)
Balance at 30 June 2023 58 6,360 38,860 2,076 2,238 12,368 185 335 62,480
Consolidated Statement of Cash Flows Consolidated Statement of Cash Flows

for the half year ended 30 June 2023 for the half year ended 30 June 2023 (continued)
Reviewed Reviewed and Reviewed Reviewed and
translated* translated*
30.06.2023 30.06.2022 30.06.2023 30.06.2022
Notes USD000 USD000 USD000 USD000
Corporate income tax paid (650) (1,712)
Cash flows from operating activities Net cash (utilised)/generated from operating activities (26,781) 4,345
Profit before tax 5,225 6,473 Cash flows from investing activities
Adjustments for: Purchase of property and equipment 17 (519) (542)
Depreciation of property and equipment 1,222 530 Proceeds from sale of property and equipment 47 42
Depreciation of the right of use asset 386 173 Dividends received 258 215
Software armotisation 185 189 Interest received from investment securities 560 1,382
Impairment loss on financial assets 8 2,853 942 Purchase of investments securities (10,728) (17,060)
Share of (profit)/loss from joint venture 20 3,795 (505) Proceeds from sale and maturities of investment securities 6,578 16,581
Fair value loss/ (gain) on investment property 18 1,136 (131) Purchase of digital gold coins (1,589) -
Dividend income 7 (258) (215) Net cash (used in ) /generated from investing activities (5,393) 618
Loss/ (profit) on disposal of property and equipment 31 (39) Cash flows from financing activities
Interest accrual on investment securities 3 (1,946) (664) Increase in balances due to banks 11,350 -
Amortisation of staff loan benefit (1) 839 Dividend paid (3,002) (3,600)
Interest on lease liabilities 21.2 152 109 Lease liabilities payments 21.2 (652) 263
Net monetary loss - 4,893 Net cash generated/ (used in) financing activities 7,696 (3,863)
Share based payment expense 1 3
Fair value gain on derivatives (5) (130) Net (decrease)/increase in cash and cash equivalents (24,478) 1,100
Operating cash flows before changes in working capital 12,776 12,467 Cash and cash equivalents at the beginning of the year 78,002 54,387
Increase in loans and advances to customers (16,235) (15,734) Cash and cash equivalents at the end of the period 11 53,524 55,487
Decrease/(increase) in other assets 12,055 (17,310) -
(Decrease)/ increase in deposits from customers (26,541) 13,498 * Comparative figures for the six months ended 30.06.2022 which were presented in Zimbabwean dollars have been translated to United
(Decrease)/Increase in other liabilities (4,105) 14,761 States Dollars by application of the closing official rate at the reporting date.
Increase in Loans and receivables from banks (4,081) (1,625)
Cash (used in)/generated from operations (26,131) 6,057

AUDITED RESULTS
REVIEWED
FINANCIAL
RESULTS
DECEMBER 2022
NOTES TO THE REVIEWED FINANCIAL STATEMENTS

for the period ended 30 June 2023
1 General information and statement of compliance Reviewed and

1.1 General information Reviewed translated*
First Capital Bank Limited (“the Bank”) provides retail, corporate and investment banking services in Zimbabwe. The Bank which 30.06.2023 30.06.2022
is incorporated and domiciled in Zimbabwe is a registered commercial bank under the Zimbabwe Banking Act Chapter (24:20). 3 Interest income USD000 USD000
The ultimate parent company is FMB Capital Holdings PLC which is incorporated in Mauritius. The Bank has a primary listing on Bank balances 748 171
the Victoria Falls Stock Exchange. The Bank is registered under registration number 148/1981. Loans and receivables from banks and investment securities 1,946 664
Loans and advances to customers 9,511 8,319
1.2 Statement of compliance Promissory notes - 15
The consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards Total interest income 12,205 9,169
(IFRS), in a manner required by the Companies and Other Business Entities Act, (Chapter 24:31), the Zimbabwe Banking Act
(Chapter 24:20) and the Banking Amendment Act of 2015. 4 Interest expense
Interest on lease liabilities (152) (109)
2 Accounting policies Balances due to banks (148) (314)
The accounting policies applied in the preparation of these reviewed consolidated interim financial statements are consistent Customer deposits (298) (179)
with the most recent financial statements for the year ended 31 December 2022 except for the change in functional currency Total interest expense (598) (602)
as stated in note 2.4.
5 Net fee and commission income
2.1 Basis of preparation Fee and commission income
The reviewed consolidated financial results have been prepared in accordance with the IAS34 Interim Financial Reporting as Transfers and other transactional fees 5,155 3,413
well as the requirements of the Companies Act (Chapter 24.03) and the Banking Act (Chapter 24.20). They do not include all the Cash withdrawal fees 3,064 2,250
financial information required for a complete set of IFRS financial statements. However, selected explanatory notes are included Account maintainance fees 2,200 1,999
to explain events and transactions that are significant to getting an understanding of the the changes in the Group’s financial Card based transaction fees 960 1,364
position and performance since the last financial statements as at and for the year ended 31 December 2022 Guarantees 92 339
Insurance commission received 52 31
2.2 Basis of measurement Fee and commission income 11,523 9,396
The consolidated financial statements for the period are measured on historical cost basis except for the following:
i) Fair value through OCI equity investments and debt instruments measured at fair value Fee and commission expense
ii) Fair value through profit and loss debt instruments for trading measured at fair value Guarantees (10) (29)
iii) Investment property measured at fair value Net fee and commission income 11,513 9,367
iv) Land and buildings measured at fair value using the revaluation method Net fee and commission income above excludes amounts included in determining the effective interest rate on financial assets
v) Investment in joint venture, the underlying investment property is measured at fair value measured at amortised cost.
Reviewed Reviewed and
The consolidated half year financial statements have been prepared on the basis of accounting policies applicable to a going 30.06.2023 translated*
concern. 30.06.2022
6 Net trading and foreign exchange income USD000 USD000
2.3 Basis of consolidation Net foreign exchange revaluation gain 6,378 6,502
The consolidated financial statements comprise the financial statements of the Bank and its subsidiary, Thulile (Private) Limited. Net foreign exchange trading income 3,411 3,481
Both companies in the Group have a 31 December year end. Inter-group transactions, balances, income and expenses were Total 9,789 9,983
eliminated on consolidation.
7 Net investment and other income
The Bank owns 100% in Thulile (Private) Limited, a company that owns a piece of land measuring 18 786 sqm. The property Dividend income 258 215
is currently not leased out and is earmarked for further development over the next three years. The Bank therefore prepares Gain on disposal of property and equipment (31) 39
consolidated financial statements per IFRS 10 Consolidated Financial Statements requirements. Investment in subsidiary and Rental income 124 69
equity of the subsidiary are eliminated when consolidating. No goodwill or gain on bargain purchase arose on acquisition of Sundry income 25 2
Thulile (Private) Limited . Total 376 325
2.4 Functional and presentation currency 8 Impairment losses on financial assets

2.4.1 Change in functional and presentation currency Stage 1
The consolidated financial statements are presented in United States Dollars (USD), the functional and presentation currency of Loans and advances to customers (151) (259)
the Group.The Group changed its functional currency from Zimbabwe Dollars (ZWL) to United States Dollars (USD) with effect Balances with banks - local & nostro (33) (11)
from 1 January 2023. Investment securities - treasury bills & bonds (64) 19
Other assets (84) (169)
The Bank migrated its listing to the Victoria Falls Stock Exchange (VFEX) during the period under review. Being established Total (332) (420)
in an Offshore Financial Services Center, the primary currency for trading on the VFEX is the United States Dollar. Stage 2
Consequently, it is expected that future funding for the Bank in the form of equity based or listed debt instruments will Loans and advances to customers 121 10
be generated in United States Dollars. In that context, financial reporting in United States Dollars provides targetted Total 121 10
users of financial statements information that presents the performance of the bank and the status of its balance sheet in Stage 3
a more understandable manner with fewer complexity than existed under inflation adjusted results in Zimbabwean dollars. Loans and advances to customers (2,642) (532)
Other factors evaluated to support the migration to USD include:
a) the USD has become the dominant currency on the Bank's balance sheet, constituting more than 80% of both financial Total (2,642) (532)
assets and financial liabilities Impairment losses recognised in profit & loss (2,853) (942)
b) more than 60% of revenue earned is denominated in USD
9 Operating expenses
c) the USD is the currency that mainly influences the Bank's labour, technology and other costs incurred in the provision of
Staff costs 9.1 (8,421) (6,565)
services
Infrastructure costs 9.2 (4,811) (3,184)
d) Zimbabwe is a multi-currency environment in which the operation of USD on the market is widely recognised with some
General expenses 9.3 (7,044) (6,822)
government liabilities being settled in USD.
Total (20,276) (16,571)
Based on the above, the Directors concluded that conditions under IAS 21 “The Effects of Changes in Foreign Exchange Rates”
Operating Costs are further analysed below:
for a change in function currency were met during the period under review.
9.1 Staff costs
The effective date for the change in functional currency is 1 January 2023 as a practical expediency. Salaries, allowances and Directors remuneration (6,290) (5,697)
Medical costs (291) (344)
2.4.2 Impact of change in functional currency Social security costs (63) (44)
IAS 21 requires the effect of change in functional currency to be accounted for prospectively. The most recent reported IAS 29 Pension costs: defined contribution plans (562) (401)
""Financial Reporting in Hyperinflationery Economies"" financial results were translated using the closing rate as at 31 December Retrenchment costs (1,214) (76)
2022. As a result of exchange rate discrepancies between the ZWL and the USD on different markets the translated values of Share based payments (1) (3)
assets carried at valuation on 31 December 2022 yielded USD values that were materially different from the actual USD values Total staff cost (8,421) (6,565)
provided by independent valuers, thus distorting the opening balances in USD. As a result of this distortion, the Directors assessed
the extent of overstatement of assets and effected a day one adjustment on the balance sheet to recognise this anomaly. Average number of employees during the period: 514 514
The effects of these adjustments are summarised below: 9.2 Infrastructure costs
Repairs and maintenance (486) (324)
Impact on property and equipment Heating, lighting, cleaning and rates (471) (311)
IAS 29 ZWL Reduction Security costs (248) (235)
Value @ 31 Reduction in other Adjusted Depreciation of property, equipment and right of use asset (1,608) (703)
December USD in asset Reduction in comprehensive opening Software amortisation (185) (189)
2022 Equivalent* balance Deferred Tax income balance Operating lease - short term leases (76) (58)
Asset ZWL000 USD000 USD000 USD000 USD000 USD000 Connectivity, software and licences (1,737) (1,363)
Land and Buildings 12,808,100 18,636 (3,640) (900) (2,740) 14,996 Total infrastructure costs (4,811) (3,183)
Motor Vehicles 2,419,649 3,521 (674) - (674) 2,847
Equipment 2,080,957 3,028 (580) - (580) 2,448 9.3 General expenses
Furniture and Fittings 455,601 663 (127) - (127) 536 Consultancy, legal & professional fees (409) (244)
Computers 1,050,575 1,529 (293) - (293) 1,236 Subscriptions, publications & stationery (356) (257)
Total 18,814,882 27,377 (5,314) (900) (4,414) 22,063 Marketing, advertising & sponsorship (385) (480)
Travel & accommodation (515) (321)
Impact of joint venture and investment property Cash transportation (417) (536)
IAS 29 ZWL Insurance costs (323) (346)
Value @ 31 Reduction Reduction in Adjusted Telex, telephones & communication (775) (580)
December USD in asset Reduction in current year opening Group recharges (2,685) (2,878)
2022 Equivalent* balance Deferred Tax profits balance in Card operating expenses (351) (216)
Asset ZWL000 USD000 USD000 USD000 USD000 USD000 Other administrative & general expenses (828) (964)
Investment in Joint Venture 13,479,449 19,613 (3,689) - (3,689) 15,924 Total general expenses (7,044) (6,822)
Investment Property 4,080,000 5,936 (1,136) (57) (1,079) 4,800
Total 17,559,449 25,549 (4,825) (57) (4,768) 20,724 Included in the operating expenses are the following:
Impact on investment securities Directors fees and remuneration:

IAS 29 ZWL Reduction For services as part of management (388) (354)
Value @ 31 Reduction in other Adjusted For the oversight role as the director (51) (57)
December USD in asset Reduction in comprehensive opening Total (439) (411)
2022 Equivalent* balance Deferred Tax income balance in
Asset ZWL000 USD000 USD000 USD000 USD000 USD000 Auditors’ remuneration:
Investment in Zimswitch shares 3,760,645 5,472 (1,479) (74) (1,405) 3,992 Audit related services (65) (59)
Review services (23) (10)
* Converted at the 31 December 2022 rate of 687.2836 Total auditors’ remuneration (88) (69)
2.5 Conversion of foreign currency transactions and balances at interbank exchange rates.
The Group used the interbank exchange rates prevailing at the dates of transactions to convert transactions in currencies other Reviewed Reviewed and
than the Group's functional currency. 10 Taxation translated*
30.06.2023 30.06.2022
2.6 Material estimates and judgements 10.1 Income tax recognised in profit or loss USD000 USD000
Estimates, judgements and assumptions made by management which would have significant effects on the reviewed consolidated Normal tax - current period (654) (4,811)
finacial statements are on the following areas: Deferred tax expense recognised in the current period (294) (374)
Total income tax charge recognised in the current period (948) (5,185)
a) Determination of the functional currency
b) Measurement of the expected credit losses on financial assets
11 Cash and bank balances
c) Fair value computations on securities, investment properties, property and equipment
Balances with central bank 4,409 29,264
d) Useful lives of property and equipment; and
Statutory reserve balance with central bank 12,317 7,231
e) Computation of tax liabilities"
Cash on hand - foreign currency 21,983 20,595
Cash on hand - local currency 4 118
Balances due from group companies 298 274
Balances with banks abroad 14,517 20,528
Cash and bank balances 53,528 78,010
Expected credit losses (4) (8)
Net cash and bank balances* 53,524 78,002
*Cash and bank balances include restricted amounts relating to Reserve Bank of Zimbabwe (card transaction cash security,
USD513 thousand (2022: 1.4 million) and Statutory reserve on customer deposits, USD12 million (2022: USD7 million)) and
foreign bank security deposits (Crown Agency and Afrexim Banks, USD3.5 million (2022:USD5 million)

AUDITED RESULTS
REVIEWED
FINANCIAL
RESULTS
DECEMBER 2022

for the period ended 30 June 2023 (continued)
Land and Furniture Motor
12 Derivative financial instruments buildings Computers Equipment and fittings vehicles Total
The Group uses cross-currency swaps to manage the foreign currency risks arising from asset and deposit balances held which are 17 Property and equipment USD000 USD000 USD000 USD000 USD000 USD000
denominated in foreign currencies. Forward exchange contracts are for trading and foreign currency risk management purposes. 30.06.2023
Balance at beginning of the period 18,636 1,529 3,028 663 3,521 27,377
Carrying amount Impact of change in functional currency (3,640) (293) (580) (127) (674) (5,314)
The fair value of the derivative financial instruments represents the present value of the positive or negative cash flows, which Adjusted opening balance 14,996 1,236 2,448 536 2,847 22,063
would have occurred if the rights and obligations arising from that instrument were closed out in an orderly market place. Additions - 293 106 7 113 519
Disposals - - - - (78) (78)
Contract amount Depreciation charge & impairment charge (156) (253) (376) (40) (397) (1,222)
The gross notional amount is the sum of the absolute value of all bought and sold contracts. The amount cannot be used to Carrying amount at end of the period 14,840 1,276 2,178 503 2,485 21,282
assess the market risk associated with the position and should be used only as a means of assessing the Group’s participation in
derivative contracts. Cost or valuation 14,996 1,529 2,554 543 2,881 22,503
Accumulated depreciation and impairment (156) (253) (376) (40) (396) (1,221)
Reviewed Audited and Carrying amount at end of the period 14,840 1,276 2,178 503 2,485 21,282
translated*
30.06.2023 31.12.2022 All property and equipment was revalued in December 2022 in both USD and ZWL. The 2022 reporting was done using the
Foreign exchange derivatives - assets USD000 USD000 ZWL values. Following the change in functional currency as at 01 January 2023, management translated the ZWL values using
Foreign exchange swaps the 31 December 2022 exchange rate of 687.2836 and compared the values to the USD valuation reports resulting in a write
Notional contract amount - Asset 1,329 1,761 down of the assets totalling USD5.3 million (see note 2.4.2). There were no significant changes in USD values of the plant and
Notional contract amount - Liability (1,324) (1,742) equipment therefore the Board adopted the December USD values and depreciated them to 30 June 2023. The inputs used in
Carrying amount 5 19 the revaluation of property and equipment have been classified as level 3 in the fair value hierarchy as they are not based on
data that is readily available from the market (see note 29.2). All property and equipment was subjected to impairment testing
13 Investment securities internally and the directors are of the view that there is no cause for raising futher charges beyond what has been applied.
Treasury bills and bonds 10,355 13,436
Digital gold coins 1,388 - Revaluations are carried out on property and equipment with sufficient regularity to ensure that the carrying value on those
Equity securities 4,336 5,807 properties is not materially different from the market values. The properties were valued by a qualified, independent valuer,
Balance at the end of the period 16,079 19,243 Integrated Properties (Pvt) Ltd in December 2022 and no revaluations were done in 2023 since there were no significant changes
in USD values.
translated* Reviewed Audited and
30.06.2023 31.12.2022 translated*
13.1 Treasury bills and bonds USD000 USD000 30.06.2023 30.12.2022
Balance at beginning of year 13,436 9,006 18 Investment properties USD000 USD000
Additions 10,728 24,596 Balance at beginning of the period 5,936 6,394
Accrued interest 2,257 570 Impact of change in functional currency (see note 2.4.2) (1,136) -
Monetary adjustment - (10,003) Changes in fair value - (612)
Maturities (7,138) (10,523) Reclassification from property and equipment - 154
Changes in fair value (721) (210) Balance at the end of the period 4,800 5,936
Effect of changes in exchange rate (8,207) -
Balance at the end of the period 10,355 13,436 Rental income derived from investment properties 124 173
As at 30 June 2023, USD2.1 million (2022: USD58 thousand) of the Treasury bills and bonds was used as security against Investment properties were revalued in December 2022 in both USD and ZWL. The 2022 reporting was done using the ZWL
borrowings from third parties. values. Following the change in functional currency as at 01 January 2023, management translated the ZWL values using the 31
December 2022 exchange rate of 687.2836 and compared the values to the USD valuation reports resulting in a write down of
13.2 Digital gold coins the assets totalling USD1.1 million.
Balance at beginning of year - -
Additions 1,589 - The fair value of investment property was determined by external, independent property valuers, Integrated Properties (Pvt)
Changes in fair value (201) - Limited in December 2022. The independent valuers have appropriately recognised professional qualifications and recent
Balance at the end of the period 1,388 - experience in the location and category of the property being valued. The independent valuers provide the fair value of the
Group`s investment property portfolio annually.
13.3 Equity securities
Balance at beginning of year 5,807 5,408 The fair value measurement of the investment property has been categorised as Level 3 in the fair value hierarchy (Note 29.2)
Impact of change in functional currency (see note 2.4.2) (1,479) - based on the inputs to the valuation technique used.
Changes in fair value 8 399
Balance at the end of the period 4,336 5,807 Operating costs incurred on investment properties during the period were USD20 thousand (2022: USD37 thousand). Investment
property comprises commercial properties that are leased out to third parties. No contingent rents are charged.
Total balance at end of the period 16,079 19,243
USD4.1m (2022:USD7 million) worth of treasury bills classified as investment securities are held to collect contractual cash flows translated*
and sell if the need arises. They are measured at fair value through other comprehensive income. The remaining balance of 30.06.2023 30.12.2022
USD6.4m (2022: 6.5 million) were issued by RBZ as settlement of legacy debt obligations and are measured at amortised cost. 19 Intangible assets USD000 USD000
Balance at beginning of the period 988 1,305
No treasury bills were held for trading purposes as at 30 June 2023. Amortisation (185) (317)
Balance at end of period 803 988
A total of USD347 thousand has been recognised as expected credit loss as at 30 June 2023.
Cost 988 2,110
Equity securities are designated as fair value through other comprehensive income and measured at fair value. Accumulated amortisation (185) (1,122)
Balance at end of period 803 988
translated* Intangible assets comprise of acquired core banking, switch and other software and licences, amortised over a period of 6.7 years.
30.06.2023 31.12.2022
14 Loans and receivables from banks USD000 USD000 30.06.2023 30.12.2022
Interbank placements 4,316 - 20 Investment in joint venture USD000 USD000
Clearing balances with other banks 93 328 Group’s interest in investment
Total carrying amount of loans and receivables from banks 4,409 328
Group's interest at beginning of year 19,613 15,426
Impact of change in functional currency (see note 2.4.2) (3,689) -
Retail Business Corporate and
Current year share of total comprehensive income in joint venture (107) 4,424
Investment Monetary adjustment - (237)
Banking Banking Banking Total Effect of exchange rate movement (303) -
15 Loans and advances to customers USD000 USD000 USD000 USD000 Carrying amount of investment at end of period 15,514 19,613
Personal and term loans 20,248 6,308 48,535 75,091
Mortgage loans 142 - - 142 The Group owns 50% investment in Makasa Sun (Pvt) Ltd. The other 50% is owned by First Capital Bank Pension Fund. Makasa
Overdrafts 47 2,574 5,353 7,974
Sun (Pvt) Ltd. owns a hotel located in the tourist resort town of Victoria Falls, Zimbabwe which it leases out but has been under
Gross loans and advances to customers 20,437 8,882 53,888 83,207
renovations since January 2023 hence no rental income has been earned in the current period.
Less: allowance for expected credit losses
Stage1 (599) (39) (63) (701)
Stage2 (7) (13) (4) (24)
translated*
Stage3 (160) (1,544) (1,243) (2,947)
30.06.2023 30.12.2022
Allowance for expected credit losses (766) (1,596) (1,310) (3,672)
21 Leases USD000 USD000
Net loans and advances to customers 19,671 7,286 52,578 79,535
21.1 Right of use asset
Balance at beginning of period 3,262 860
Retail Business Corporate and Total
Additions - 2,994
Investment
Terminated - (10)
Banking Banking Banking Banking
Depreciation for the period (386) (582)
31-Dec-22 USD000 USD000 USD000 USD000
Balance at end of period 2,876 3,262
Personal and term loans 17,088 3,254 39,518 59,860
Mortgage loans 123 - - 123
21.2 Lease liabilities
Overdrafts 49 1,796 5,143 6,988
Maturity analysis - contractual undiscounted cash flows
Gross loans and advances to customers 17,260 5,050 44,661 66,971
Less than one year 1,331 1,297
Less: allowance for expected credit losses
One to five years 2,091 1,701
Stage1 (427) (6) (116) (549)
More than five years 544 343
Stage2 (45) (89) (11) (145)
Total 3,966 3,341
Stage3 (219) (10) (76) (305)
Allowance for expected credit losses (691) (105) (203) (999)
Lease liabilities included in statement of financial position
Net loans and advances to customers 16,569 4,945 44,458 65,972
Current 970 1,058
Non - current 2,007 1,595
30.06.2023 30.06.2022
Balance at end of period 2,977 2,653
16 Other assets USD000 USD000
Prepayments and stationery 1,941 3,257
Amounts recognised in profit/ loss
Card security deposit and settlement balances 2,407 2,351
Interest on lease liabilities (152) (109)
Other receivables 568 3,088
Expenses - short term & low value leases (76) (58)
Money transfer agents 481 115
Depreciation charge for the period (386) (582)
Central bank receivables 2,192 439
Total (614) (749)
International cards clearing balances 311 1,490
Staff loans prepaid benefit 253 903
Statement of cash-flows - Leases
Total other assets 8,153 11,643
Total cash outflows (652) (624)
Current 7,968 4,712
Non - current 185 6,931
Total 8,153 11,643

AUDITED RESULTS
REVIEWED
FINANCIAL
RESULTS
DECEMBER 2022

Reviewed Audited and 28 Authorised share capital (continued)
translated* 28.2 Non - distributable reserves
30.06.2023 30.12.2022 This relates to the balance of currency translation reserves arising from the fair valuation of assets and liabilities on 1 January
22 Balance due to Banks USD000 USD000 2009 when the Bank adopted the United States dollar as the functional and presentation currency.
Bank balances due to banks abroad 270 40
Local interbank money market deposit 1,138 28.3 Fair value through other comprehensive income reserve
Offshore credit 10,684 - This relates to fair value movements on investment securities held at fair value through other comprehensive income which
Clearance balances due to local banks 423 1,125 include equity and debt securities.
Total deposits from banks 12,515 1,165
28.4 Property revaluation reserve
23 Deposits from customers Property revaluation movement on property and equipment is classified under revaluation reserve. Additional detail on
Demand deposits revaluation of assets is contained in note 17.
Retail 23,628 29,447
Business banking 8,709 12,039 28.5 General reserve
Corporate and investment banking 65,163 86,234 This amount represents the excess of imparment allowance required by the Reserve Bank of Zimbabwe over and above the
Total 97,500 127,720 amount calculated in accordance with IFRS 9 Financial instruments with the provisions of and models developed in accordance
with IFRS 9 "financial instruments".
Call deposits
Retail 3,369 3,149 28.6 Share based payment reserve
Business banking 1,359 109 The fair value of share options granted to employees is classified under share based payment reserve. The reserve is reduced
Corporate and investment banking 2,193 398 when the employees exercise their share options.
Total 6,921 3,656
28.6.1 Local managerial share option scheme
Savings accounts This scheme benefits managerial employees. Managerial employees are granted shares in First Capital Bank. Share options issued
Retail 16 35 have a vesting period of three years. The Group has no legal or constructive obligation to repurchase or settle the options in cash.
Business banking 1 1
Total 17 36 28.6.2 Movements during the period
The following reconciles the share options outstanding at the beginning and end of the year:
Other
Corporate and investment banking 5,085 4,652 30.06.2023 31.12.2022
Total 5,085 4,652 Weighted Weighted
Number average Number average
Total deposits from customers 109,522 136,063 of share exercise of share exercise
options price options price
Included in the deposits above are local currency deposits of USD9.4 million (2022: USD41 million). Deposits from customers are
financial instruments classified at amortised cost. Fair value of deposits from customers approximates carrying amount because Outstanding at beginning of the year 5,380,000 0.05 6,400,000 0.05
of their short tenure. Included in customer accounts are deposits of USD5.1 million (2022: USD4.7 million) held as collateral for
loans advanced and letters of credit. Granted during the period 1,090,000 0.07 860,000 0.07
30.06.2023 30.12.2022 Forfeited during the period (150,000) 0.03 (1,220,000) 0.03
Concentration of customer deposits USD000 % USD000 %
Trade and services 40,792 37 38,386 28 Exercised during the period - (660,000) -
Energy and minerals 285 0 1,921 1
Agriculture 3,744 3 1,972 1 Outstanding at 31 June 6,320,000 0.15 5,380,000 0.15
Construction and property 635 1 1,301 1
Light and heavy industry 16,911 15 29,956 22 Exercisable at end of period 760,000 0.13 710,000 0.13
Physical persons 27,012 25 32,630 24
Transport and distribution 9,241 9 14,205 11 Weighted average contractual life of options outstanding 2.10 1.96
Financial services 10,902 10 15,692 12 at end of period (years)
Total 109,522 100 136,063 100
29 Financial instruments
Reviewed Reviewed and Reviewed Audited and
translated* translated*
30.06.2023 30.12.2022 30.06.2023 31.12.2022
24 Employee benefit accruals USD000 USD000 29.1 Classification of assets and liabilities USD000 USD000
Staff retention Financial assets
Balance at beginning of year 1,565 2,898 Financial assets at fair value through profit and loss
Provisions made during the period 835 1,546 Derivative financial assets 5 18
Provisions used during the period (1,555) (2,880) Total 5 18
Balance at end of period 845 1,565
Financial assets at amortised cost
Outstanding employee leave Cash and bank balances 53,524 78,002
Balance at beginning of year 132 72 Loans and advances to customers 79,535 65,973
Provisions made during the period 190 201 Clearing balances due from other banks 4,409 328
Provisions used during the period (86) - Treasury bills 6,382 6,650
Monetary adjustments - (141) Other assets* 5,170 7,483
Balance at end of period 236 132 Total 149,020 158,436
* Excludes prepayments and stationery.
Redundancy
Balance at beginning of year - - Financial assets at fair value through other comprehensive income
Provisions made during the period 29 - Treasury bonds and promissory notes 3,973 6,786
Provisions used during the period - - Unquoted equity securities 4,336 5,807
Balance at end of period 29 - Total 8,309 12,593
Balance at end of period 1,110 1,697 Total Financial assets 157,329 171,047
The staff retention incentive represents an accrual for a performance based staff incentive to be paid to staff and is included Financial liabilities at amortised cost
in staff costs. Employee entitlements to annual leave are recognised when they accrue to employees. The accrual is made for Customer deposits 109,522 136,063
the estimated liability for annual leave as a result of services rendered by employees up to the reporting date and the charge is Balances due to other banks 12,515 1,165
recognised in profit or loss within staff costs. Other liabilities* 20,676 17,682
30.06.2023 30.12.2022 Lease liability 2,977 2,653
25 Other liabilities USD000 USD000 Balances due to group companies 2,108 69
Accrued expenses 1,296 2,183 Total Financial liabilities 147,798 157,632
Internal accounts 3,637 9,029 *Excludes deferred income
Other foreign currency claims 6,361 6,420
Withholding taxes including Intermediate Money Transfer Tax 876 97 29.2 Fair value hierarchy of assets and liabilities held at fair value
Balance at end of period 12,170 17,729 Fair value hierarchy
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,
26 Retirement benefit plans grouped into Levels 1 to 3 based on the degree to which the fair value is observable.
First Capital Bank Pension Fund
The First Capital Bank Pension Fund (“The Fund”) manages retirement funds for the active members and pensioners. The Fund Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or
is run by appointed Trustees. The assets of the Funds are managed as one composite pool, with no separation for the active liabilities.
members and pensioners. The awarding of pension increases and increase in accumulated values to active members is done in Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are
consideration of the performance of the Fund and any requirement to increase risk reserves. observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are
Defined contribution plans not based on observable market data (unobservable inputs).
The defined contribution pension plan to which the Group contributes 18% is provided for permanent employees. Over and
above the Group’s contribution, the employee contributes 6.5% of the basic salary. Under this scheme retirement benefits Level 1 Level 2 Level 3 Total
are determined by reference to the employees’ and the Group’s contributions to date and the performance of the Fund. All 30-Jun-23 USD000 USD000 USD000 USD000
employees are also members of the National Social Security Authority Scheme to which both the employer and the employees Recurring fair value measurements
contribute. The Group contributes 4.5% of pensionable emoluments up to a capped maximum for eligible employees. Financial assets
Derivative assets - 5 - 5
Defined benefit pension plans Digital gold coins 1,388 - - 1,388
The Fund provides for annuities for those pensioners who opted not to purchase the annuity from an external insurer at the point Treasury bills - - 3,973 3,973
of retirement. All annuities are now purchased outside the Fund at the point of retirement. The provision for pension annuities Unquoted equity instruments - - 4,336 4,336
to pensioners and other death benefits are significant defined benefits. As a result a valuation was performed based on IAS 19 Balance at 30 June 2023 1,388 5 8,309 9,702
Employee Benefits; for the whole fund for both assets and liabilities as at 31 December 2022 and had a net surplus of USD6.4
million. No valuation was done at 30 June 2023 as there hasn't been significant changes to the position. Non - financial assets
Property and equipment - 21,282 21,282
This surplus is attributable to the Fund and the Trustees have discretion as to the application and appropriation of the surplus. The Investment property - 4,800 4,800
surplus could not be recognised as an asset by the Group because the Group will not receive any future benefits from the surplus Investment in joint venture - 16,400 16,400
in the form of contribution holidays or refunds. The Fund rules clearly state that the Group will not be paid any refund relating to Balance at 30 June 2023 - - 42,482 42,482
the surplus. In addition the Group is currently not making any additional contributions for the pensioners, therefore, there will be
no benefit to the Group arising from reduced contributions or contribution holiday. 29.3 Valuation techniques for the level 2 fair value measurement of assets and liabilities held at fair value
The table below sets out information about the valuation techniques applied at the end of the reporting period in measuring
27 Deferred tax assets and liabilities whose fair value is categorised as Level 2 in the fair value hierarchy. A description of the nature of the
Deferred tax balances techniques used to calculate valuations based on observable inputs and valuations is set out in the table below:
The analysis of the deferred tax assets and deferred tax liabilities is as follows:
Category of asset/liability Valuation technique applied Significant observable inputs
Reviewed Audited and Foreign Exchange Contracts Discounted cash flow Interest and foreign currency exchange rates
translated*
30.06.2023 31.12.2022 29.4 Valuation techniques for the level 3 fair value measurement of assets and liabilities held at fair value
Deferred tax USD000 USD000
Deferred tax balances The table below sets out information about the significant unobservable inputs used at the end of the reporting period in
Deferred tax assets (4,014) (1,309) measuring assets and liabilities whose fair value is categorised as Level 3 in the fair value hierarchy.
Deferred tax liabilities 7,805 7,971
Total deferred tax liability 3,791 6,662 Range of estimates utilised for
the unobservable inputs
28 Authorised share capital Category of asset/liability Valuation Significant unobservable inputs
Number of ordinary shares 5,000,000,000 5,000,000,000 applied
Unquoted equity financial instrument Discounted Cashflows and discount rates 29% to 85%
28.1 Issued share capital USD000 USD000 cash flow/
Ordinary shares 58 58 Earnings
Share premium 6,360 6,360 multiple
Total 6,418 6,418 Land and buildings Market/ Capitalisation rates 7% to 9%
income
The total authorised number of ordinary shares at year end was 5 billion (2022: 5 billion) with issued and fully paid up shares being approach
2.2 billion (2022: 2.2 billion). The unissued share capital is under the control of the directors subject to the restrictions imposed Investment properties Market/ Capitalisation rates 7% to 9%
by the Companies and Business and Entities Act (Chapter 24.31), the Victoria Falls Stock Exchange listing requirements and the income
Articles and Memorandum of Association of the Bank. approach
Treasury bills Discounted Market Yield – not actively traded 7%
Premiums from the issue of shares are reported in the share premium. cash flow

AUDITED RESULTS
REVIEWED
FINANCIAL
RESULTS
DECEMBER 2022

29 Financial instruments (continued) 30 Risk management (continued)

29.5 Reconciliation of recurring level 3 fair value measurements 30.2.1 Interest rate risk
The table below summarises the Group’s interest rate risk exposure.
Investment
in Joint Non-
Investment Investment venture - Up to 1 1 to 3 3 to 6 6 months 1 to 5 Over interest
securities properties Property Total month months months to 1 year years 5 years bearing Total
USD000 USD000 USD000 USD000 30.6.2023 USD000 USD000 USD000 USD000 USD000 USD000 USD000 USD000
Balance at 01 January 2023 12,593 5,936 20,283 38,812 Assets
Impact of change in functional currency (1,479) (1,136) (3,883) (6,498) Cash and bank balances 19,219 - - - - - 34,305 53,524
Additions 10,728 - - 10,728 Derivative financial assets 5 - - - - - - 5
Accrued interest 1,946 - - 1,946 Investment securities 211 1,775 3,266 109 - 6,382 4,336 16,079
Maturities (6,559) - - (6,559) Loans and receivables from banks 764 3,645 - - - - - 4,409
Total gains and losses recognised in profit or loss (8,207) - - (8,207) Loans and advances to customers 950 75,694 2,258 2,341 1,964 - - 83,207
Total gains and losses recognised in other comprehensive (713) - - (713) Other assets - - - - - - 8,153 8,153
income Property and equipment - - - - - - 21,282 21,282
Balance at 30 June 2023 8,309 4,800 16,400 29,509 Investment properties - - - - - - 4,800 4,800
Investment in joint venture - - - - - - 15,514 15,514
Intangible assets - - - - - - 803 803
30 Risk management
Right of use assets - - - - - - 2,876 2,876
Financial risk management objectives
Total assets 21,149 81,114 5,524 2,450 1,964 6,382 92,069 210,652
The Group’s business involves taking on risks in a targeted manner and managing them professionally. The core functions of the
Liabilities
Group’s risk management are to identify all key risks for the Group, measure these risks, manage the risk positions and determine
Lease liabilities - - - - - - 2,977 2,977
capital allocations. The Group regularly reviews its risk management policies and systems to reflect changes in markets, products
Deposits from banks 12,515 - - - - - - 12,515
and best market practice.
Deposits from customers 65,140 2,233 2,962 3,631 28,445 7,111 - 109,522
Employee benefit accruals - - - - - - 1,110 1,110
The Group’s aim is to achieve an appropriate balance between risk and return and minimise potential adverse effects on the
Other liabilities - - - - - - 12,170 12,170
Group’s financial performance.
Deferred tax liabilities - - - - - - 3,791 3,791
Current tax liabilities - - - - - - 307 307
The Group defines risk as the possibility of losses or profits foregone, which may be caused by internal or external factors. The
Due to group companies - - - - - - 2,108 2,108
Board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign
Total liabilities 77,655 2,233 2,962 3,631 28,445 7,111 22,463 144,500
exchange risk, interest rate risk and credit risk. Internal audit and Operational Risk and Control departments are responsible for Interest rate Re - pricing gap (56,506) 78,881 2,562 (1,181) (26,481) (729) 69,606 66,152
the review of risk management and the control environment. Cumulative gap (56,506) 22,375 24,937 23,756 (2,725) (3,454) 57,668
The risks arising from financial instruments to which the Group is exposed include among other risks credit risk, liquidity risk,
Net interest income sensitivity (“NII”)
market risk and operational risk. NII measures the sensitivity of annual earnings to changes in interest rates. NII is calculated at a 37% and 5% change in local
currency and foreign currency interest rates respectively.
30.1 Capital risk management
Capital risk – is the risk that the Group is unable to maintain adequate levels of capital which could lead to an inability to support
The Group’s interest income sensitivity is shown below:
business activity or failure to meet regulatory requirements. Capital risk is mostly managed for the bank. Reviewed Audited and translated*
The Group’s objectives when managing capital, which is a broader concept than the ‘equity’ on the face of the statement of 30.06.2023 31.12.2022
financial position, are: Net interest income sensitivity Impact on earnings Impact on earnings
• To comply with the capital requirements set by the banking regulators; Local currency USD000 USD000
• To safeguard the Group’s ability to continue as a going concern so that it can continue to provide returns 3700bps increase in interest rates (256) (468)
• To maintain a strong capital base to support the development of its business. 3700bps decrease in interest rates 256 468
Benchmark - -
Capital adequacy and the use of regulatory capital are monitored daily by the Group’s management and the Directors, employing Foreign currency
techniques based on guidelines developed by the Basel Committee as implemented by the Reserve Bank of Zimbabwe for 500bps increase in interest rates 90 946
supervisory purposes. The Bank’s regulatory capital comprises of three tiers; 500bps decrease in interest rates (90) (946)
• Tier 1 Capital: comprises contributed capital, accumulated profits, share based payment reserve and currency translation Benchmark - -
reserve.
• Tier 2 Capital: comprises impairment allowance, revaluation reserve and part of currency translation reserve. 30.2.2 Foreign exchange risk
• Tier 3 Capital: comprises operational and market risk capital. This is a risk that the value of a financial liability or asset denominated in foreign currency will fluctuate due to changes in the
exchange rate. The Group takes on exposures to the effects of fluctuations in the prevailing foreign currency exchange rates
The Reserve Bank of Zimbabwe requires each bank to maintain a core capital adequacy ratio of 8% and total capital adequacy ratio in the financial position and cash flows. Mismatches on foreign exchange assets and liabilities are minimised through the daily
of 12%. The table below summarises the composition of regulatory capital and the ratios. monitoring of the net foreign exchange exposure by treasury. Currency swaps are also used to manage foreign exchange risk
where necessary.
translated* The table below summarises the Group’s financial instruments at carrying amounts, categorised by currency.
30.06.2023 31.12.2022
USD000 USD000 ZWL GBP Rand Other
Share capital 58 58 currency
Share premium 6,360 6,360 (USD (USD (USD (USD Total
Accumulated profits 38,860 37,582
Equiv) Equiv) Equiv) Equiv)
General reserve 185 185
At 30 June 2023 USD000 USD000 USD000 USD000 ZWL000
Share based payment reserve 335 335
Assets
Fair value through OCI reserve 2,238 4,527
Cash and bank balances 1,969 666 541 1,825 5,001
Currency translation reserve 5 5
Investment securities 1,070 - - - 1,070
Total core capital 48,041 49,052
Loans and advances to customers 1,572 - 4 - 1,577
Less market and operational risk capital (1,708) (2,679)
Other assets 2,242 1,278 - - 3,520
Tier 1 capital 46,333 46,373
Total financial assets 6,853 1,945 545 1,825 11,167
Currency translation reserve 2,071 2,071
Revaluation reserves 12,368 19,686
Liabilities
General provisions (limited to 1.25% of weighted risk assets) 701 549
Deposits from banks 1,452 - 270 - 1,722
Tier 2 capital 15,140 22,306
Deposits from customers 9,388 355 650 510 10,903
Other liabilities 1,522 38 23 84 1,668
Total tier 1 & 2 capital 61,473 68,679
Total financial liabilities 12,363 393 943 594 14,293
Net currency positions (5,510) 1,552 (399) 1,231 (3,126)
Market risk 619 732
Operational risk 1,089 3,166
Exchange rate sensitivity to profit/ (loss) for the period
Tier 3 capital 1,708 3,898
Exchange rate increase of 20% (1,102) 310 (80) 246 (625)
Exchange rate decrease of 20% 1,102 (310) 80 (246) 625
Total tier 1, 2 & 3 capital base 63,181 72,577
Deductions from capital (4,336) (5,807)
Exchange rates applied in 2023 ZWL GBP Rand EUR
Total capital base 58,845 66,770
USD closing rate 5,739.80 1.2747 18.8143 1.095
Credit risk weighted assets 139,784 128,957
Operational risk equivalent assets 13,614 39,570
30.3 Credit risk
Market risk equivalent assets 7,733 9,150
Credit risk is the risk of financial loss should the Group’s customers, clients or market counter parties fail to fulfil their contractual
Total risk weighted assets (RWAs) 161,131 177,677
obligations to the Group. The Group actively seeks to originate and manage credit risk in such a way as to achieve sustainable
Tier 1 capital ratio 29% 26%
asset growth and risk adjusted returns in line with board-approved risk parameters. The credit risk that the Group faces arises
Tier 1 and 2 capital ratio 38% 39%
mainly from corporate and retail loans advances and counter party credit risk arising from derivative contracts entered into with
Total capital adequacy ratio 37% 38%
our clients. Other sources of credit risk arise from treasury bills, government bonds, settlement balances with counter parties and
bank balances with Central Bank and other related banks. Credit risk management objectives are:
Credit risk capital - is subject to guidelines provided by the regulator which are based on Basel 1 principles. On this approach the
Banking book exposures are categorised into broad classes of assets with different underlying risk characteristics. Risk components
Mortgages over residential and commercial properties Supporting the achievement of sustainable asset and revenue
are transformed into risk weighted assets using predetermined exposure and loss probability factors. Capital requirements for
growth in line with our risk parameters
credit risk are derived from the risk weighted assets.
Mortgages over residential and commercial properties Operating sound credit granting processes and monitoring credit
risk using appropriate models to assist decision making.
Market risk capital - is assessed using regulatory guidelines which consider the risk characteristics of the different trading book
Mortgages over residential and commercial properties Ensure credit risk taking is based on sound credit risk management
assets. Risk components are transformed into risk weighted assets and, therefore, capital requirements, based on predetermined
principles and controls; and
exposure and loss probability factors.
Mortgages over residential and commercial properties Continually improving collection and recovery.
Operational risk capital - is assessed using the standardised approach. This approach is tied to average gross income over three
(b)Credit risk grading
years per regulated business lines as an indicator of scale of operations. Total capital charge for operational risk equals the sum
Corporate Exposures
of charges per business lines.
The Group uses internal credit risk gradings that reflect its assessment of the probability of default of individual counter parties.
The Group uses internal rating models tailored to the various categories of counter party. Borrower and loan specific information
Economic capital - Economic capital methodologies are used to calculate risk sensitive capital allocations for businesses incurring
collected at the time of application (such as level of collateral; and turnover and industry type for wholesale exposures) is fed
market risk. Consequently the businesses incur capital charges related to their market risk.
into this rating model. This is supplemented with external data such as credit bureau scoring information on individual borrowers.
In addition, the models enable expert judgement to be fed into the final internal credit rating for each exposure. This allows for
30.2 Market risk
considerations which may not be captured as part of the other data inputs into the model.
The Group takes on exposure to market risks, which is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market prices. Market risks arise from open positions in interest rate, currency and equity
The credit scores from this model are mapped to the regulatory scale with 10 grades which are in turn categorised into Risk
products, all of which are exposed to general and specific market movements and changes in the level of volatility of market rates
Categories 1-3. Those in Category 1 display no or unusual business as usual risk and the risk of default is low. Category 2 implies
or prices such as interest rates, credit spreads, foreign exchange rates and equity prices.
there are some doubts that the borrower will meet its obligations but the risk of default is medium. Category 3 implies that there
are strong doubts that the customer will meet its obligations and the risk of default is either high or has occurred.
The Group separates exposures to market risk into either trading or banking book. Trading portfolios include those positions
arising from market–making transactions where the Group acts as principal with clients or with the market; this is mainly to
support client trading activity.
Category 1 (sub categories 1a – 3c): 0 to 29 days past due, have no or temporary problems and the risk of
default is low
Non trading book primarily arises from the management of the Group’s retail and commercial banking assets and liabilities.
Category 2 (sub categories 4a – 7c): 30 days to 89 days past due, implies there are doubts that the customer
will pay but the risk of default is medium
Interest rate risk is the risk that the Group will be adversely affected by changes in the level or volatility of market interest rates.
Category 3 (sub categories 8 – 10): 90 days+ past due (Default), there are doubts that the customer will pay
The Group is exposed to various risks associated with the effects of fluctuations in the prevailing levels of market interest rates on
and the risk of default is high
its financial position and cash flows. The responsibility of managing interest rate risk lies with the Assets and Liabilities Committee
(ALCO). On a day to day basis, risks are managed through a number of management committees. Through this process, the Group
Retail exposures
monitors compliance within the overall risk policy framework and ensures that the framework is kept up to date. Risk management
After the date of initial recognition, for retail business, the payment behaviour of the borrower is monitored on a periodic
information is provided on a regular basis to the Risk and Control Committee and the Board.
basis to develop a behavioural internal credit rating. Any other known information about the borrower which impacts their
creditworthiness such as unemployment and previous delinquency history is also incorporated into the behavioural internal credit
rating. These ratings are reflected on the following delinquency bucket; Performing loans (Bucket 0); 1day to 30 days past due
(Bucket 1); 31 days to 60 days past due (Bucket 2); 61 days to 89 days past due (Bucket 3) and 90 days+ past due (default, Bucket 4).

AUDITED RESULTS
REVIEWED
FINANCIAL
RESULTS
DECEMBER 2022

30 Risk management (continued) 30 Risk management (continued)

(c) Expected credit losses measurement (ECLs) (h) ECL model governance
The expected credit loss (ECLs) - is measured on either a 12 - month (12M) or Lifetime basis depending on whether a significant The models used for PD, EAD and LGD calculations are governed on a day to day through the Impairments Committee. This
increase in credit risk has occurred since initial recognition or whether an asset is considered to be credit impaired. committee comprises of senior managers in risk, finance and the business. Decisions and key judgements made by the Impairments
• ECLs are discounted at the effective interest rate of portfolio Committee relating to the impairments and model overrides will be taken to Board Risk, Board Loans and Board Audit Committee.
• The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed
to credit risk (i)Maximum exposure to credit risk by credit quality grade before credit enhancements
• The Group uses a portfolio approach to calculate ECLs. The portfolios are segmented into retail, corporate and treasury and The Group has an internal rating scale which is mapped into the Basel II grading system. The internal rating is broadly classified
further by product. into; performing loans, standard monitoring and non-performing.
• Expected credit losses are the probability weighted discounted product of the Probability of Default (PD), Exposure at Default
(EAD), and Loss Given Default (LGD), defined as follows: Performing loans
Loans and advances not past due and which are not part of renegotiated loans are considered to be performing assets, these are
Probability of default (PD) - is the likelihood of a borrower defaulting on its financial obligation (as per “Definition of default and graded as per RBZ credit rating scale as grade 1 - 3.
credit-impaired” below), either over the next 12 months (12M PD), or over the remaining lifetime (Lifetime PD) of the obligation.
PDs are modelled using historic data into 12 month and Lifetime PDs. Where data is not available proxies which resemble the Standard monitoring grade
risk of default characteristics of the exposure are used. The PDs are determined at portfolio level and segmented into various These are loans and advances which are less than 90 days past due and in some cases not past due but the business has significant
products. concern on the performance of that exposure, as per RBZ credit rating scale these are grade 4 - 7.
PDs modelled using historical data are then adjusted for forward looking factors. PDs are mapped into regulatory grades as Non-performing grade
follows: These are loans and overdrafts on which interest is no longer accrued or included in income unless the customer pays back. These
non-performing (past due) assets include balances where the principal amount and / or interest is due and unpaid for 90 days or
Corporate exposures more, as per RBZ credit rating scale these are grade 8 - 10.
Stage 1 12 Month PD Central Bank Grades 1 to 3
(Internal Category 1) Bank balances with other banks are held with banks which have the following credit ratings:
Stage 2 Life Time PD Central Bank Grades 4 to 7 Counterparty Latest ratings 2023 Previous ratings
(Internal Category 2) 2022
Stage 3 Default PD Central Bank Grades 8 to 10 Crown Agency BB BB
(Internal Category 3)
Other asset balances are held by counter parties with the following ratings;
Retail exposures Counterparty 2023 2022
Stage 1 12 Month PD Central Bank Grades 1 to3 (Internal VISA AA- AA-
grades bucket 0 & bucket 1) MasterCard International A+ A+
Stage 2 Life Time PD Central Bank Grades 4 to 7
(Internal grades bucket 2 & bucket 30.3.1 Maximum credit risk exposure
3)
Stage 3 Default PD Central Bank Grades 8 to 10 Maximum credit risk exposure ECL Reconciliation
(internal grades bucket 4) 30-Jun-23 Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Loans and advances to customers USD000 USD000 USD000 USD000 USD000 USD000 USD000 USD000
Corporate 43,500 3,972 6,416 53,888 63 4 1,243 1,310
Treasury exposures Business banking 4,203 326 4,353 8,882 39 13 1,545 1,597
For debt securities in the treasury portfolio and interbank exposures, performance of the counter party is monitored for any Retail 20,065 147 225 20,437 599 7 159 765
indication of default. PDs for such exposures are determined based on benchmarked national ratings mapped to external credit Total 67,768 4,445 10,994 83,207 701 24 2,947 3,672
rating agencies grade. For other bank balances where there are external credit ratings PDs are derived using those external credit Balances with central bank
ratings. Savings bonds and treasury bills 10,355 - - 10,355 347 - - 347
Bank balances 16,726 - - 16,726 43 - - 43
Exposure at default (EAD) - is the amount the Group expects to be owed at the time of default, over the next 12 months (12M Total 27,081 - - 27,081 390 - - 390
EAD) or over the remaining lifetime (Lifetime EAD). For a revolving commitment, the EAD includes the current drawn balance plus Balances with other banks and settlement balances
any further amount that is expected to be drawn up by the time of default, should it occur. For term loans EAD is the term limit Bank balances 19,223 - - 19,223 3 - - 3
while for short term loans and retail loans EAD is the drawn balance. Debt securities and interbank balances EAD is the current Total 19,223 - - 19,223 3 - - 3
balance sheet exposure. Other assets
RBZ receivable other 2,192 - - 2,192 3 - - 3
Loss given default (LGD) - represents the Group’s expectation of the extent of loss on a defaulted exposure. LGD varies by type Other assets 2,407 - - 2,407 - - - -
of counter party, type and seniority of claim and availability of collateral or other credit support. LGD is expressed as a percentage Total 4,709 - - 4,709 - - - -
loss per unit of exposure at the time of default (EAD). LGD is calculated on a 12-month or lifetime basis, where 12-month LGD is
the percentage of loss expected to be made if the default occurs in the next 12 months and Lifetime LGD is the percentage of loss Total on balance sheet 118,781 4,445 10,994 134,220 1,094 24 2,947 4,065
expected to be made if the default occurs over the remaining expected lifetime of the loan. LGD is modelled based on historical Guarantees and letters of credit
data. LGD for sovereign exposure is based on observed recovery rates for similar economies. Guarantees 418 - - 418 - - - -
Letters of credit 111 - - 111 - - - -
Default Total 529 - - 529 - - - -
The Group considers a financial asset to be in default when:
The above table represents a worst case scenario of credit risk exposure to the Bank at 30 June 2023, without taking account of
• The borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as any collateral held or other credit enhancements attached. For on-balance sheet assets, the exposures set out above are based on
realising security (if any is held); or carrying amounts as reported in the statement of financial position.
• The financial asset is more than 89 days past due.
30.3.2 Reconciliation of movements in expected credit losses during the year.
IFRS 9 outlines a ‘three-stage’ model for impairment based on changes in credit quality since initial recognition as summarised Stage 2 -
below: Lifetime ECL Stage 3 -
Stage 1 - 12 not credit Lifetime ECL
month ECL impaired credit Total
i) 12 month ECLs; (Stage 1 - no increase in credit risk) impaired
USD000 USD000 USD000 USD000
ECLs measured at an amount equal to the portion of lifetime expected credit losses that result from default events possible Balance at beginning of the year 1,075 164 350 1,589
within the next 12 months. The 12 month ECL is calculated for the following exposures: Movement with P&L impact
• Corporate loans with regulatory grades from 1 - 3 New financial assets purchased or originated 802 389 1,285 2,476
• Retail loans graded in bucket 0 and bucket 1 Transfers from stage 1 to stage 2 (782) - 782 -
• Debt securities, loans to banks and bank balances which are not past due; and Transfers from stage 2 to stage 3 - (531) 531 -
• These are a product of 12 months PD, 12 months LGD and EAD. Write offs - - -
Total movement 19 (140) 2,597 2,496
ii) Life time ECLs (Stage 2 - significant increase in credit risk refer to 30.3 (d) Balance at 30 June 2023 1,094 24 2,947 4,065
ECLs are measured based on expected credit losses on a lifetime basis. It is measured for the following exposures;
• Corporate loans with regulatory grades from grade 4 to grade 7 30.3.3 Credit risk concentration of loans and advances were as follows;
• Retail loans in bucket 2 to 3 (bucket 2 is 31 days to 60 days past due, bucket 3 is 61 days to 89 days past due) 2023 2022
• Debt securities, loans to banks and bank balances where the credit risk has significantly increased since initial recognition; and Industry/Sector USD000 % USD000 %
• These are a product of lifetime PD, lifetime LGD and EAD. Trade and services 12,765 15 8,481 13
Energy and minerals 44 0 149 0
iii) Life time ECLs (Stage 3 - default) Agriculture 17,605 21 13,943 21
ECLs are measured based on expected credit losses on a lifetime basis. This is measured on the following exposures. Light and heavy industry 18,871 23 15,328 23
• All credit impaired/ in default corporate and retail loans and advances to banks and other debt securities in default. Physical persons 21,268 25 17,529 25
• These are corporates in regulatory grade 8 - 10 and retail loans in bucket 4 Transport and distribution 12,226 15 11,096 17
• Exposures which are 90 days+ past due; and Financial services 428 1 445 1
• These are a product of default PD, lifetime LGD and EAD. Total 83,207 100 66,971 100%
(d) Significant increase in credit risk (SICR) 30.3.4 Collateral held for exposure
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when An estimate of the fair value of collateral and other security enhancements held against loans and advances to customers are as
estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost shown below:
or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and Reviewed Audited and
informed credit assessment and including forward-looking information. translated*
30.06.2023 31.12.2022
The assessment of significant increase in credit risk incorporates forward looking information and is performed on a monthly USD000 USD000
basis at a portfolio level for all retail loans. Corporate and treasury exposures are assessed individually and reviewed monthly and Performing loans 171,883 155,500
monitored by an independent team in Credit Risk department, together with quarterly reviews by the Impairment Committee Non-performing loans 7,979 1,250
and Board Loans Review Committee of exposures against performance criteria. Total 179,862 156,750
Significant increase in credit risk - Quantitative measures 30.4 Liquidity risk

• Corporate loans - if the loan is reclassified from regulatory grades 1 - 3 to grades 4 - 7 Liquidity risk is the risk that the Group may fail to meet its payment obligations when they fall due and to replace funds when they
• Retail loans - if the loan is reclassified from buckets 0 and 1 to buckets 2 to 3 are withdrawn, the consequences of which may be the failure to meet the obligations to repay deposits and fulfil commitments to
• Treasury exposures which are past due. lend. Liquidity risk is inherent in all banking operations and can be affected by a range of Group specific and market wide events.
The efficient management of liquidity is essential to the Group in maintaining confidence in the financial markets and ensuring
Significant increase in credit risk - Qualitative measures retail and corporate that the business is sustainable.
There are various quantitative measures which include:
• Retail - Retrenchment, Dismissal, Salary diversion, employer facing difficulties Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long term funding and liquidity
• Corporate - Adverse business changes, changes in economic conditions, quality challenges, among others. management requirements.
(e) Benchmarking Expected Credit Loss • Growing and diversifying funding base to support asset growth and other strategic initiatives, balanced with strategy to
Corporate and treasury reduce the weighted funding cost;
Corporate portfolio assessment is performed by way of a collective assessment semi-empirical IFRS 9 model (the ECL Model) • To maintain the market confidence in the Group;
developed in consultation with external consultants supported by available historic information to support the modelling of PD, • Maintaining adequate levels of surplus liquid asset holdings in order to remain within the liquidity risk appetite;
LGD and EAD. Individual assessment is performed on all customer loans and advances after having defined a minimum exposure • Set early warning indicators to identify the emergence of increased liquidity risk or vulnerabilities;
threshold. ECL for Treasury exposures is based on benchmarked PDs and LGDs due to lack of historical data.ECL for Retail • To maintain a contingency funding plan that is comprehensive.
exposures are based on model output with no benchmarking comparative since enough historical default data was available
when designing the calculation model.
(f) Forward – looking information incorporated in the ECL models

The assessment of SICR and the calculation of ECLs both incorporate forward-looking information. The Group has performed
historical analysis and identified the key economic variables impacting credit risk and expected credit losses for each portfolio.
These economic variables and their associated impact on the ECL vary by financial instrument. Expert judgment has also been
applied in this process.
(g) Write offs

The Group will write off retail accounts following charge off of the account if the equivalent of an instalment is not recovered
cumulatively over a 12-month period post charge off. Corporate accounts are written off once security has been realised
depending on the residual balance and further recovery prospects. The corporate write off policy is not rules based, or time
bound.

AUDITED RESULTS

DECEMBER 2022
REVIEWED
FINANCIAL
RESULTS

30 Risk management (continued)

30 Risk management (continued) Contingent liabilities and commitments as at 30 June 2023
Liquidity risk management process Less than 1 to 3 3 to 6 6 to 12 1 to 5
Liquidity risk is managed as; 1 month months months months years Total
a) Business as usual referring to the management of cash inflows and outflows of the Group in the ordinary course of business. USD000 USD000 USD000 USD000 USD000 USD000
b) Stress liquidity risk – refers to management of liquidity risk during times of unexpected outflows. The Group’s Assets and Assets
Liabilities Committee (“ALCO”) monitors and manages liquidity risk. The Group’s liquidity management process as carried out by Commitment to lend 2,097 1,194 1,278 1,397 2,503 8,469
the ALCO and Treasury units includes: Total assets 2,097 1,194 1,278 1,397 2,503 8,469
• Day to day funding and monitoring of future cash flows to ensure that funding requirements are met; Liabilities
• Maintaining a high balance of cash or near cash balances that can easily be liquidated as protection against unforeseen Commitment to lend 8,469 - - - - 8,469
funding gaps; Total liabilities 8,469 - - - - 8,469
• Monitoring liquidity ratios against internal and regulatory benchmarks; Liquidity gap (6,372) 1,194 1,278 1,397 2,503 -
• Limits are set across the business to control liquidity risk; Cumulative liquidity gap (6,372) (5,179) (3,901) (2,503) - -
• Early warning indicators are set to identify the emergence of increased liquidity risk and;
• Sources of liquidity are regularly reviewed by ALCO to maintain a wide diversification of source of funding; 31 Other risks
• Managing concentration of deposits. Strategic risk
The roles of the Chairman and the Managing Director are not vested in the same person. The executive team formulates the
Reviewed Audited and strategy under the guidance of the Board which approves it. The executive directors bear the responsibility to execute the
translated* approved strategy. The Board reviews the performance and suitability of the strategy at least quarterly.
30.06.2023 31.12.2022
Liquidity ratios USD000 USD000 Legal and compliance risk
Total liquid assets 63,929 75,167 The Risk Management Committee ensures that the management and operations of the Group’s business is done within the
Deposits and other short term liabilities 130,209 150,766 established governance and regulatory control framework of the Reserve Bank of Zimbabwe and other regulatory bodies. A
Liquidity ratio 49% 50% dedicated legal and compliance unit is in place to monitor legal and compliance requirements and ensure that they are met on a
Reserve Bank of Zimbabwe minimum 30% 30% daily basis.
LIQUIDITY COVERAGE RATIO (%) Reputation risk

Category Sub-Category Total Weighted Value (Average) The Group adheres to very strict reputation standards set based on its chosen set of values. The Human Resources Committee of
USD000 the Board assists the Board in ensuring that staff complies with set policies and practices consistent with the reputation demands
High-quality liquid assets of both the Group and the industry. The compliance unit and human resources function monitor compliance by both management
Level 1 Assets 50,966 and staff with the Group’s ethical codes and compliance standards in managing conduct risk.
Total high-quality liquid assets 50,966
Cash outflows Operational risk
Stable deposits 404 This is the risk of losses arising from inadequate or failed internal processes, people and/or systems or from external events. A
Less stable deposits 3,563 significant part of the Group’s operations are automated and processed in the core banking system. Key banking operations in
Operational deposits (all counterparties) and 1,271 corporate and investment banking, retail and business banking and treasury are heavily dependent on the Group’s core banking
deposits in networks of cooperative banking system. The core banking system also supports key accounting processes for financial assets, financial liabilities and revenue
institutions including customer interface on mobile, internet banking and related electronic platforms.
Non-operational deposits (all counterparties) 27.113
Other contractual funding obligations 2,621 Practices to minimise operational risk are embedded across all transaction cycles. Risk workshops are held for the purpose of
Total cash outflows 34,972 identifying major risks in the operating environment and methods of mitigating the risks. The Group employs the standardised
Cash inflows approach to determine capital required to cover operational risk. Each function carries out a risk and control assessment of their
Other contractual cash inflows 15,360 processes on a regular basis. The assessment results are reviewed by Operational Risk Management department. Internal Audit
Total cash inflows 15,360 audits selected functions at given times.
Total high-quality liquid assets 50,966
Total net cash outflows 19,612 Risks and Ratings
Liquidity coverage ratio (%) 260% The Central Bank conducts regular examinations of bank and financial institutions it regulates. The last on-site examination of
the bank was as at 30 June 2023 and it assessed the overall condition of the bank to be satisfactory. This is a score of “2” on
the CAMELS rating scale. The CAMELS rating evaluates banks on capital adequacy, asset quality, management and corporate
Liquidity profiling as at 30 June 2023 governance, liquidity and funds management and sensitivity to market risks.
The amounts disclosed in the table below are the contractual undiscounted cash flows. The assets which are used to manage
liquidity risk, which is mainly cash and bank balances and investment securities are also included on the table based on the The CAMELS and Risk Assessment System (RAS) ratings are summarised in the following tables;
contractual maturity profile.
CAMELS Components
On balance sheet items as at 30 June 2023
Assets held for managing Less than 1 to 3 3 to 6 6 to 12 1 to 5 Carrying CAMELS component Currrent Examination June 2023 Prior Examination November 2016
liquidity risk 1 month months months months years 5+ years Total amount Capital 2 - Satisfactory 1 - Strong
(contractual maturity dates) USD000 USD000 USD000 USD000 USD000 USD000 USD000 USD000 Asset Quality 2 - Satisfactory 2 - Satisfactory
Cash and bank balances 42,396 1,556 2,295 4,361 2,916 - 53,524 53,524 Management 2 - Satisfactory 2 - Satisfactory
Derivative financial assets 5 - - - - - 5 5 Earnings 2 - Satisfactory 1 - Strong
Investment securities 247 2,071 3,326 127 10,308 - 16,079 16,079 Liquidity and Funds Management 2 - Satisfactory 2 - Satisfactory
Loans and receivables from 4,409 - - - - - 4,409 4,409 Sensitivity to Market Risk 2 - Satisfactory 1 - Strong
banks Overall Composite Rating 2 - Satisfactory 2 - Satisfactory
Loans and advances to 24,227 15,285 12,139 14,727 16,829 - 83,207 79,535
customers First Capital Bank Risk Matrix as at 30 June 2023
Other assets (3,072) - - - 35,218 21,282 53,428 53,428 Adequacy of risk Direction of
Total assets 68,212 18,912 17,760 19,215 65,271 21,282 210,652 206,980 Level of inherent management Overall composite overall composite
Liabilities Type of risk risk systems risk risk
Lease liabilities - - - - 2,977 - 2,977 2,977 Credit risk Moderate Acceptable Moderate Stable
Deposits from Banks 1,452 - - - 11,063 - 12,515 12,515 Liquidity risk Low Acceptable Low Stable
Deposits from customers 2,892 14,959 22,052 41,809 27,810 - 109,522 109,522 Interest rate risk Low Acceptable Low Stable
Provisions 1,110 - - - - - 1,110 1,110 Foreign exchange Moderate Acceptable Moderate Stable
Other liabilities 63,078 1,227 - 2,265 11,871 - 78,441 78,441 Operational & Cyber risk High Acceptable High Increasing
Current income tax liabilities - 76 77 154 - - 307 307 Legal risk Low Strong Low Stable
Balances due to Group 2,108 - - - - - 2,108 2,108 Reputational risk Low Strong Low Stable
companies Compliance Moderate Acceptable Moderate Stable
Total liabilities - (contractual 70,640 16,262 22,129 44,228 53,721 - 206,980 206,980 Strategic risk Moderate Acceptable Moderate Stable
maturity) Overall Moderate Acceptable Moderate Stable
Liquidity gap (2,428) 2,650 (4,369) (25,013) 11,550 21,282 3,672
Cumulative liquidity gap (2,428) 222 (4,147) (29,160) (17,610) 3,672

AUDITED RESULTS
REVIEWED
FINANCIAL
DECEMBER 2022
RESULTS

31 Other risks (continued) 34 Related parties (continued)

Interpretation of risk matrix 35 Events after the reporting date
Level of inherent risk There were no events noted after reporting date that required to be adjusted for or disclosed in the consolidated financial
Low - reflects a lower than average probability of an adverse impact on a banking institution’s capital and earnings. Losses in a results of the Group.
functional area with low inherent risk would have little negative impact on the banking institution’s overall financial condition.
36 Going concern
Moderate - could reasonably be expected to result in a loss which could be absorbed by a banking institution in the normal course The Directors have no reason to believe that the Group will not be a going concern in the period ahead. Going concern assessment
of business. was performed by review of the economic conditions under which the Group is expected to perform over the next 12 months,
High - reflects a higher than average probability of potential loss. High inherent risk could reasonably be expected to result in a its ability to adapt its strategy, business and operating models to the projected macro environment, financial forecasts and
significant and harmful loss to the banking institution. business underwriting capacity. The Group has sufficient capital, human and physical resources as well as sources of sustainable
deposits which are well diversified and is therefore able to address shortterm stress factors within reasonable parameters.
Adequacy of risk management systems The Group’s financial statements as at 30 June 2023 have therefore been prepared on the going-concern assumption.
Weak - risk management systems are inadequate or inappropriate given the size, complexity, and risk profile of the banking
institution. Institution’s risk management systems are lacking in important ways and therefore a cause of more than normal
37 Other information
supervisory attention. The internal control systems will be lacking in important aspects particularly as indicated by continued
control exceptions or by the failure to adhere to written policies and procedures.
Zimbabwe Dollar Historical Consolidated Statement of Profit or Loss and Other Comprehensive Income
Acceptable - management of risk is largely effective but lacking to some modest degree. While the institution might be having
some minor risk management weaknesses, these have been recognized and are being addressed. Management information
Whilst USD has been shown as the reporting currency, the performance and financial position of the group has also been presented
systems are generally adequate
in historical ZWL giving indication of the performance and financial position had the functional currency remained as ZWL.
Strong - management effectively identifies and controls all types of risk posed by the relevant functional areas or per inherent
risk. The board and senior management are active participants in managing risk and ensure appropriate polices and limits are
Historical Historical
put in place. The policies comprehensively define the bank’s risk tolerance, responsibilities and accountabilities are effectively
unaudited unaudited
communicated.
30.06.2023 30.06.2022
ZWL000 ZWL000
The Board and senior management are active participants in managing risk and ensure appropriate policies and limits are put in
Interest income 20,373,543 2,162,205
place.
Interest expense (1,295,071) (141,543)
Net interest income 19,078,472 2,020,662
The policies comprehensively define the Group’s risk tolerance. Responsibilities and accountabilities are effectively communicated.
Net fee and commission income 20,834,207 2,298,437
Net trading and foreign exchange income 80,703,750 2,600,517
Overall composite risk
Net investment and other income 614,265 78,111
Low - would be assigned to low inherent risk areas. Moderate risk areas may be assigned a low composite risk where internal
Fair value gain on investment property 22,297,470 1,604,625
controls and risk management systems are strong and effectively mitigate much of the risk.
Total non interest income 124,449,693 6,581,690
Moderate - risk management systems appropriately mitigate inherent risk. For a given low risk area, significant weaknesses in
Total income 143,528,164 8,602,352
the risk management systems may result in a moderate composite risk assessment On the other hand, a strong risk management
system may reduce the risk so that any potential financial loss from the activity would have only a moderate negative impact on Impairment losses on financial assets (22,509,877) (218,605)
the financial condition of the organisation. Net operating income 121,018,287 8,383,747
High - risk management systems do not significantly mitigate the high inherent risk. Thus the activity could potentially result in Operating expenses (40,594,152) (3,744,602)
a financial loss that would have a significant impact on the bank’s overall condition, even in some cases where the systems are
considered strong. Share of profit from joint venture 77,143,005 3,820,330
Profit before tax 157,567,140 8,459,475
Direction of overall composite risk Taxation (12,420,388) (1,203,648)
Increasing- based on the current information, composite risk is expected to increase in the next twelve months Profit for the period 145,146,752 7,255,827
Decreasing - based on current information, composite risk is expected to decrease in the next twelve months
Stable - based on the current information, composite risk is expected to be stable in the next twelve months. Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
External Credit Ratings Gain on property revaluations 75,606,499 8,227,570
Latest credit ratings Previous credit ratings Deferred tax (18,689,926) (1,001,650)
Rating agent 2022/23 2021/22 Gain on financial assets at fair value through other comprehensive income 53,838,257 2,019,406
Global Credit Rating Co. A+(ZW) A+(ZW) Deferred tax (10,691,167) (113,318)
Net gain on other comprehensive income 100,063,663 9,132,008
32 Fair value of financial instruments not held at fair value
The disclosed fair values of these financial assets and financial liabilities measured at amortised cost approximate their carrying Total other comprehensive income 100,063,663 9,132,008
value because of their short term nature. Total comprehensive income 245,210,415 16,387,835
translated*
30.06.2023 31.12.2022 Zimbabwe Dollar Historical Consolidated Statement of Financial Position
Carrying Fair Carrying Fair Historical Historical
amount value amount value unaudited unaudited
USD000 USD000 USD000 USD000 30.06.2023 31.12.2022
Financial Assets ZWL000 ZWL000
Cash and bank balances 53,524 53,524 78,002 78,002 Assets
Loans and receivables from banks 4,409 4,409 328 328 Cash and bank balances 331,991,208 53,609,309
Loans and advances to customers 79,535 79,535 6,650 6,650 Derivative financial instruments 28,989 12,576
Other assets 5,169 5,169 65,973 65,973 Investment securities 91,301,188 13,225,558
Total 142,637 142,637 150,953 150,953 Loans and receivables from banks 532,385 225,622
Loans and advances to customers 456,512,749 45,342,180
Financial Liabilities Other assets 26,064,473 7,710,234
Deposits from banks 12,515 12,515 1,165 1,165 Investment properties 27,551,021 4,080,000
Deposits from customers 109,522 109,522 136,063 136,063 Investment in joint venture 90,622,453 13,479,449
Lease liability 2,977 2,977 2,653 2,653 Property and equipment 92,057,693 18,814,882
Other liabilities 12,193 12,193 17,682 17,682 Intangible assets 7,420 8,941
Balances due to group companies 2,108 2,108 69 69 Right of use assets 7,846,885 1,042,315
Total 139,315 139,315 157,632 157,632 Current tax asset - 1,072,374
Total assets 1,124,516,464 158,623,440
33 Segment results of operations
Corporate Liabilities
Retail Banking Banking Treasury Total Derivative financial instruments 2,097 -
30-Jun-23 USD000 USD000 USD000 USD000 Lease liabilities 17,088,245 1,823,304
Net interest income 3,761 5,451 2,394 11,606 Balances due to banks 71,831,331 800,769
Net fee and commission income 6,956 4,366 191 11,513 Deposits from customer 628,635,024 93,514,048
Net trading and foreign exchange income - - 9,789 9,789 Employee benefit accruals 4,621,685 1,166,032
Net investment and other income - - 376 376 Other liabilities 115,070,815 12,183,437
Fair value loss on investment property - - (1,136) (1,136) Current tax liabilities 3,133,268 -
Total Income 10,717 9,817 11,614 32,148 Balances due to group companies 9,985,417 47,628
Impairment losses on financial assets (75) (2,603) (175) (2,853) Deferred tax liabilities 27,905,200 3,834,865
Net operating income 10,643 7,214 12,492 30,349 Total liabilities 878,273,082 113,370,083
Staff costs (4,931) (2,186) (1,304) (8,421)
Infrastructure costs (excluding depreciation) (2,715) (1,195) (901) (4,811) Equity
General expenses (2,876) (2,492) (1,676) (7,044) Capital and reserves
Operating expenses (10,522) (5,873) (3,881) (20,276) Share capital 216 216
Segment contribution 121 1,341 8,611 10,073 Share premium 24,160 24,160
Share of profits of joint ventures - - - (3,795) Retained earnings 168,812,434 26,403,501
Taxation (948) Non - distributable reserve 7,785 7,785
Profit for the period - - - 4,276 Fair value through other comprehensive income reserve 6,815,683 3,601,907
Total assets 20,417 61,939 124,624 206,980 Property revaluation reserve 70,446,723 15,083,797
Total liabilities 26,305 85,913 32,282 144,500 General reserve 126,981 126,981
Share - based payment reserve 9,400 5,010
34 Related parties
The Group is controlled by Afcarme Zimbabwe Holdings (Private) Limited incorporated and domiciled in Zimbabwe which owns Total equity 246,243,382 45,253,357
52.5% (2022: 52.5%) of the ordinary shares. 15% is held by an Employee Share Ownership Trust (ESOT) and the remaining 32.5% Total ZWL Capital equity and liabilities 1,124,516,464 158,623,440
of the shares are widely held. The ultimate parent of the Group is FMB Capital Holdings PLC incorporated in Mauritius. There are
other companies which are related to First Capital Bank through common shareholdings or common directorship. The table below summarises the composition of regulatory capital and the ratios in Zimbabwe dollar currency as required by the
Reserve Bank of Zimabbwe
34.1 Directors and key management compensation Reviewed Audited and
Reviewed Audited and translated*
translated* 30.06.2023 31.12.2022
30.06.2023 31.12.2022 ZWL000 ZWL000
USD000 USD000 Share capital 216 216
Salaries and other short term benefits 1,119 1,336 Share premium 24,160 24,161
Post-employment contribution plan 44 13 Accumulated profits 144,816,142 25,398,969
Share based payments - 4 Share based payment reserve 9,400 5,010
Total 1,163 1,353 Fair value through OCI reserve 49,457,178 6,311,658
Currency translation reserve 3,508 3,508
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the Total core capital 194,310,604 31,743,522
activities of the Group directly or indirectly. These include the Managing Director, Chief Finance Officer, Head of Risk, Commercial Less market and operational risk capital (9,802,137) (2,678,733)
Director, Chief Operating Officer, Consumer Banking Director, Chief Internal Auditor, Head of Compliance, Company Secretary Tier 1 capital 184,508,467 29,064,789
and Head of Human Resources. Currency translation reserve 4,277 4,277
Revaluation reserves 58,558,416 13,530,151
34.2 Loans to directors and key management General provisions (limited to 1.25% of weighted risk assets) 4,154,131 78,682
Reviewed Audited and Tier 2 capital 62,716,824 13,613,110
translated*
30.06.2023 31.12.2022 Total tier 1 & 2 capital 247,225,291 42,677,899
USD000 USD000
Deposits (57) (21) Market risk 3,550,757 503,088
Loans and advances 358 251 Operational risk 6,251,380 2,175,645
Net balances (due to)/ from directors & key management 301 230 Tier 3 capital 9,802,137 2,678,733
34.3 Balances with group companies Total tier 1, 2 & 3 capital base 257,027,428 45,356,632
Bank balances due from group companies 298 274 Deductions from capital (3,990,908) (3,211,694)
Total 298 274 Total capital base 253,036,520 42,144,938
Credit risk weighted assets 802,333,970 88,629,784
Other balances due from group companies 6 - Operational risk equivalent assets 78,142,244 27,195,562
Other balances due to group companies (2,114 ) (69) Market risk equivalent assets 44,384,467 6,288,596
Total (2,108) (69) Total risk weighted assets (RWAs) 924,860,681 122,113,942
Tier 1 capital ratio 20% 24%
Tier 1 and 2 capital ratio 27% 35%
Total capital adequacy ratio 27% 35%

AUDITED RESULTS VICTORIA
FALLS
STOCK
EXCHANGE

DECEMBER 2022
WE here to meet the financial needs of

our customers and to enable them
to achieve their extraordinary.
ARE
Belief
Financial
institution to be
listed on the
comes
first
Victoria Falls
Stock Exchange
Invest today. Contact your broker or trade through the online platform
(VFEX Direct- https://vfexdirect.vfex.exchange)
Botswana � Malawi • Mozambique • Zambia • Zimbabwe

First Capital Bank is a Registered Commercial Bank and a member of the Deposit Protection Scheme.
www.firstcapitalbank.co.zw
REPORT ON REVIEW OF INTERIM FINANCIAL RESULTS FOR THE SIX PERIOD ENDED 30 JUNE 2023
We have reviewed the accompanying condensed statement of financial position of First Capital Bank Limited and its
subsidiary (the “Group”) as of 30 June 2023, the condensed statement of comprehensive income, the condensed
statement of changes in equity and the condensed statement of cash flows for the six-month period then ended.
Management is responsible for the preparation and presentation of the interim financial information in accordance with
International Accounting Standard 34 “Interim Financial Reporting”, the requirements of the Banking Act (Chapter 24:20)
and the Securities and Exchange (Victoria Falls Stock Exchange Listings Requirements) Rules, 2020.
Our responsibility is to express a conclusion on the interim financial information based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements 2410, “Review of Interim
Financial Information Performed by the Independent Auditor of the Entity.” A review of interim financial information
consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical
and other review procedures. A review is substantially less in scope than an audit conducted in accordance with
International Standards on Auditing and consequently does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial
information is not prepared, in all material respects, in accordance with International Accounting Standards on Interim
Financial Reporting, the requirements of the Banking Act (Chapter 24:20) and the Securities and Exchange (Victoria Falls
Stock Exchange Listings Requirements) Rules, 2020.
______________________
Deloitte & Touche
Per: Lawrence Nyajeka
Partner
PAAB Practice Certificate Number 0598
30 August 2023

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AUDITED RESULTS

FOR THE YEAR ENDED 31

Chairman’s Statement Managing Director’s Report

REVIEWED FINANCIAL RESULTS FOR THE PERIOD ENDED 30 JUNE 2023 1

FOR THE YEAR ENDED 31

Corporate Governance Report

REVIEWED FINANCIAL RESULTS FOR THE PERIOD ENDED 30 JUNE 2023 2

FOR THE YEAR ENDED 31

Ciaran McSharry Patrick Devenish

Audit committee Compliance

Human resources & nominations committee

REVIEWED FINANCIAL RESULTS FOR THE PERIOD ENDED 30 JUNE 2023 3

FOR THE YEAR ENDED 31

Independent Auditors Review Conclusion

Impairment losses on financial assets 8 (2,853) (942) Liabilities

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows Consolidated Statement of Cash Flows

REVIEWED FINANCIAL RESULTS FOR THE PERIOD ENDED 30 JUNE 2023 4

NOTES TO THE REVIEWED FINANCIAL STATEMENTS

1 General information and statement of compliance Reviewed and

2.4 Functional and presentation currency 8 Impairment losses on financial assets

Impact on investment securities Directors fees and remuneration:

REVIEWED FINANCIAL RESULTS FOR THE PERIOD ENDED 30 JUNE 2023 5

FOR THE PERIOD ENDED 30 JUNE 2023

NOTES TO THE REVIEWED FINANCIAL STATEMENTS

REVIEWED FINANCIAL RESULTS FOR THE PERIOD ENDED 30 JUNE 2023 6

NOTES TO THE REVIEWED FINANCIAL STATEMENTS

REVIEWED FINANCIAL RESULTS FOR THE PERIOD ENDED 30 JUNE 2023 7

NOTES TO THE REVIEWED FINANCIAL STATEMENTS

29 Financial instruments (continued) 30 Risk management (continued)

REVIEWED FINANCIAL RESULTS FOR THE PERIOD ENDED 30 JUNE 2023 8

NOTES TO THE REVIEWED FINANCIAL STATEMENTS

30 Risk management (continued) 30 Risk management (continued)

Significant increase in credit risk - Quantitative measures 30.4 Liquidity risk

(f) Forward – looking information incorporated in the ECL models

(g) Write offs

REVIEWED FINANCIAL RESULTS FOR THE PERIOD ENDED 30 JUNE 2023 9

FOR THE YEAR ENDED 31

NOTES TO THE REVIEWED FINANCIAL STATEMENTS

30 Risk management (continued)

LIQUIDITY COVERAGE RATIO (%) Reputation risk

REVIEWED FINANCIAL RESULTS FOR THE PERIOD ENDED 30 JUNE 2023 10

NOTES TO THE REVIEWED FINANCIAL STATEMENTS

31 Other risks (continued) 34 Related parties (continued)

REVIEWED FINANCIAL RESULTS FOR THE PERIOD ENDED 30 JUNE 2023 11

FOR THE YEAR ENDED 31

WE here to meet the ﬁnancial needs of

Botswana � Malawi • Mozambique • Zambia • Zimbabwe

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