A dive into FBC Holdings & Securities 2025 Performance.

1. A look See

The 2025 financial year marked a significant structural shift for FBC Holdings (FBCH). Following the macroeconomic stability ushered in by the introduction of the Zimbabwe Gold (ZWG) currency in late 2024, the Group’s 2025 performance reflects a “return to core banking.” For years, Zimbabwean financial institutions relied heavily on non-core income (revaluation gains and exchange rate hedging). In 2025, FBC successfully transitioned its revenue model, with core trading activities now accounting for over 80% of total revenue.

Key Highlights:

• Total Net Income: ZWG 21.8 billion (20% growth in the statement of financial position).
• Asset Quality: NPL ratio at a healthy 3.47%.
• Capital Adequacy: All subsidiaries remained above regulatory minimums.
• Strategic Pivot: The launch of FBC Properties and the integration of FBC Crown Bank (formerly Standard Chartered Zimbabwe).

2. Asset Quality: Non-Performing Loan (NPL) Analysis

Asset quality is the primary litmus test for a bank operating in a volatile environment. FBC’s NPL ratio stood at 3.47% as of 31 December 2025.

Analysis for Investors:

• Benchmark Performance: The 3.47% ratio is well within the RBZ’s target benchmark of 5%. This indicates a robust credit risk management framework.
• Loan Book Composition: Loans and advances rose by 21% to ZWG 10.24 billion. The transition of the loan book to being predominantly USD-denominated (or USD-indexed) has protected the bank from local currency devaluation, but it introduces “credit-induced currency risk”—where the borrower earns ZWG but owes USD.
• Sectoral Exposure: The bank has maintained a diversified portfolio across agriculture, mining, and retail. The recovery of the agricultural sector in 2025 (6.6% GDP growth) significantly supported the repayment capacity of the bank’s client base.

3. Capital Adequacy Ratio (CAR)

Capital adequacy ensures that the bank has a sufficient cushion to absorb losses.

Regulatory Compliance:

• Group Level: Shareholders’ funds increased by 19% to ZWG 4.1 billion.
• Subsidiary Level: FBC Bank and FBC Crown Bank are fully capitalized. The acquisition of Standard Chartered’s local operations provided a high-quality capital injection and a sophisticated client base.
• FBC Securities: The securities arm closed the year with total capital resources of approximately ZWG 25.2 million, significantly exceeding the liquid capital requirements for a registered stockbroker on the ZSE.

Investor Insight: High CAR levels suggest that FBC is not just “surviving” but has the “dry powder” necessary for further acquisitions or organic expansion into the regional market (e.g., FBC Reinsurance in Botswana).

4. Liquidity Management and Funding

In 2025, the Reserve Bank of Zimbabwe maintained a tight monetary policy (ZWG money supply growth below 2%). This created a “liquidity crunch” in the broader market.

FBC’s Response:

• Deposit Growth: Customer deposits surged by 65%, reaching ZWG 21.8 billion. This is a testament to “flight to quality,” where depositors moved funds to FBC as a trusted Tier-1 institution.
• Prudential Liquidity Ratio: The Group maintained a liquidity ratio well above the 30% regulatory minimum.
• Funding Mix: The bank successfully secured regional lines of credit to support foreign currency lending, reducing reliance on expensive local overnight accommodation.

5. Profitability Metrics: ROE and ROA

Profitability in 2025 was “cleaner” than in 2024. In previous years, profits were inflated by “paper gains” (revaluation of properties and foreign currency).

The Numbers:

• Return on Equity (ROE): While ROE moderated to approximately 12.8% (down from hyper-inflated levels in 2023/24), this reflects sustainable earnings.
• Net Interest Income (NII): Increased by 4% to ZWG 1.47 billion.
• Fee and Commission Income: Rose by 24% to ZWG 1.53 billion.

Investor Decision Point: The convergence of NII and Fee Income suggests a balanced revenue stream. Investors should value this “quality of earnings” higher than the volatile revaluation gains of the past.

6. Efficiency Ratio (Cost-to-Income)

Cost management was a priority in 2025 due to the high cost of doing business in Zimbabwe (energy, security, and talent retention).

• Efficiency Gains: The Group’s cost-to-income ratio improved as a result of “automation and operational consolidation.”
• Paperless Initiatives: FBC achieved a 50% reduction in paper consumption through digital workflows, which directly impacted the bottom line.
• Centralization: The consolidation of shared services across FBC Bank, FBC Insurance, and FBC Securities has reduced redundant administrative overheads.

7. Digital Inclusion and Digitalization

FBC’s strategy for 2025 was “Digital First.”

• AI Integration: The Group embraced Artificial Intelligence for process improvement and personalized product development.
• Noku (WhatsApp Banking): This remains a lead channel for financial inclusion, allowing the bank to reach the “unbanked” without the brick-and-mortar costs of traditional branches.
• Digital Reach: With over 550,000 mobile banking subscribers, FBC is a leader in transactional banking.
• Infrastructure: Significant capital expenditure was allocated to core system upgrades to ensure 99.9% uptime for digital channels.

8. Foreign Currency Management

With over 70% of the Zimbabwean economy operating in USD, FBC’s ability to manage its “Net Open Position” (NOP) is critical.

• Hedged Positions: The Group maintained a “long” position on hard assets (property and gold coins) to hedge against ZWG volatility.
• Yields: Property investments yielded 8-13% in USD terms, while alternative investments like Gold Coins delivered a return of 51% in local currency terms.
• Stability: The ZWG exchange rate remained relatively stable (25-27 per USD) for much of 2025, allowing for more predictable foreign currency planning.

9. Conclusion

FBC Holdings is currently a “Buy” for investors seeking exposure to a stable, diversified financial services group in Zimbabwe.

Reasons to Invest:

1. Successful Integration: The acquisition of Standard Chartered (FBC Crown Bank) is now yielding synergies.
2. Revenue Quality: The shift to core income (80%) makes the dividend policy more sustainable.
3. Property Upside: The newly formed FBC Properties is set to capitalize on the high demand for residential and retail space.
4. Resilience: A 3.47% NPL ratio in a 15% inflation environment demonstrates superior underwriting.

Risks to Monitor:

• Political/Regulatory Change: Shifts in the de-dollarization roadmap could impact the USD-denominated loan book.
• Liquidity Squeeze: Continued tight monetary policy may limit the volumes of ZWG-denominated trades on the ZSE.