Staff Writer
FBC Holdings says its insurance subsidiaries are trading profitably, despite the challenging operating environment, and expects the trend to continue during the second half of the year.
The group’s insurance units are FBC Reinsurance Limited and Eagle Insurance Company Limited. The group also has FBC Reinsurance Botswana, which specialises in providing reinsurance solutions and risk management services to regional and global clients.
Group chairman Herbert Nkala, in a statement of financials for the interim period to June 30, 2024, said the operations in Botswana are in line with expectations and anticipate significant returns from the investment.
“The focus for the group is microinsurance and diaspora insurance products, in addition to the traditional core insurance products, as we aim to expand our market reach and promote financial inclusion,” he said.
According to Nkala, the insurance sector is experiencing significant changes due to technological advancements, evolving stakeholder expectations, and a shifting regulatory and competitor landscape.
He said these factors are driving innovation and adaptability within the sector. “This has seen an increase in product offerings such as microinsurance, which suits our country’s per capita income levels,” said Nkala.
Nkala on Climate Risk, Finance, and Sustainability said climate change presents a significant threat to the global economy, and Zimbabwe is particularly vulnerable to its devastating long-term impacts.
He said to mitigate these risks and foster resilience, a concerted effort is underway involving the government, public institutions, regulatory bodies, and non-governmental organisations.
Nkala said the Reserve Bank of Zimbabwe (RBZ) has issued the Climate Risk Management Guideline, bolstering the banking sector’s capacity to withstand climate shocks.
“FBC Bank Limited is at the forefront of this initiative, actively collaborating with public and private partners to develop innovative financial solutions and align with the Sustainable Development Goals.
“By implementing the Sustainability Standards and Certification Initiative, guided by the RBZ, we are embedding sustainability into our core operations. This commitment not only fulfils our corporate social responsibility but also creates long-term value for our stakeholders,” he said.
Commenting on the Banking Cluster, Nkala said the banking sector has remained stable, safe, and sound according to the Reserve Bank of Zimbabwe, and the industry is going through transformation and innovation, which has resulted in the deepening of product and service offerings.
Overall, the group achieved a profit before tax of ZWG669.7 million on an operational profit of ZWG1.4 billion, weighed down by a monetary loss of ZWG774 million.
The monetary loss reflects the impact of the hyperinflationary environment on the group’s net financial assets, which subsisted during the year’s first quarter.
Operating costs for the period under review were ZWG659 million, driven by the mixed macroeconomic conditions during the first half of the year.
“Inflationary trends were experienced during the first quarter. However, there was relative stability in the second quarter of the year, which improved our cost management,” said Nkala.
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