- McSharry joined FCA in 2018
- He was elected as an acting MD in 2019
- He became the MD in 2020
Harare- Ciaran McSharry has stepped down as the Managing Director (MD) of First Capital Bank (FCA) according to a circular released by the Bank on the 12th of June 2023. He was the MD since 2020 and held the role of Acting Managing Director in November 2019 whilst supporting FMB Capital Holdings as Group Chief Finance Officer.
He joined the bank in 2018 as Chief Finance Officer after holding various senior positions at Barclays UK, Bank of America/Merrill Lynch and Lloyds Banking Group. His joining coincided with the rebranding of the Bank from Barclays Bank to FCA. With his seasoned experience within the banking sector, he has helped the Bank navigate through the hyperinflationary periods of 2019 to 2020 as well as overcome the COVID-19 pandemic effects which affected all business operations, including the tech businesses which though enjoyed a bit of remorse.
Under Ciaran McSharry, First Capital Bank (FCA) has become one of the largest and most profitable banks in Zimbabwe. He is credited with steering the Bank through the 2019-2020 financial crisis when Zimbabwe entered into a technical recession and was hit by global financial crisis courtesy of the COVID-19 pandemic. He is further credited for acquiring lines of credit negotiated with the European Investment Bank (EUR12.5m) and Afreximbank (US$20m) in a cash-stripped society. Additionally, McSharry is recognised for his prowess advocacy for corporate responsibility management, strides to achieve customer satisfaction, technology and innovation as well as good risk management.
When McSharry joined as the CFO in 2018, Zimbabwe was already embracing an inflationary environment. When he adopted the acting MD’s role by the end of 2019 in November, Zimbabwe was already bracing a turmoil economic atmosphere infested by a volatile exchange rate, a rapidly depreciating local currency which affected the consumer purchasing power so much that in 2020, the re-use of US dollar was legalised to enforce stability.
As an acting MD, McSharry managed to navigate through the headwinds to make sure the Bank remained floating. His contribution to the Bank can further be tracked since 2020 when he started his full career as a MD. In 2020, McSharry led the bank to navigate through a record inflationary environment where inflation peaked to 837.5% to close at 348.6% in December. During the HY2020, FCA braced a closed-up industry due to the coronavirus pandemic. The impact of the coronavirus dampened production and productivity due to reduced time of operation. This means that borrowing was low, reducing interest charges and deposits.
High inflation that peaked at 837.5% further eroded people's income, making long-term borrowing in the local currency a myth. The combined effect of the COVID-19 pandemic and a volatile economic environment resulted in increased operating costs while interest rates continued to significantly lag behind inflation. However, the Bank employed cost containment strategies whilst at the same time looking for pockets of opportunity amidst the turbulence to increase revenue.
Resultantly, the Bank’s capital liquidity position was strong compared to prior years. The total capital adequacy ratio was 28% compared to the regulatory requirement of 12% and the core capital ratio was 16% compared to the regulatory minimum of 8%. The liquidity position was 66% against a regulatory minimum of 30%.
That caused the Bank to overturn a loss of ZWL732 million in 2019 to a profit of ZWL759 million for the period. In FY2020, the Bank further closed the year with a strong capital and liquidity base, with a total capital adequacy ratio of 29% (regulatory minimum 12%) whilst the liquidity ratio was 70% against the regulatory minimum of 30%.
In 2021, the Bank recorded an increase in total income in real terms of 39%, to close the year at ZWL7.5 billion against ZWL5.4 billion in 2020. Net interest income increased by 96% on the back of a 235% growth in interest-earning assets. Net commissions and fees increased by 33% representing the effect of increased customer transactions and moderate fee adjustments. A profit after tax amounting to ZWL3.4 billion was posted in 2021, increasing from ZWL0.8b in 2020. Total assets grew by 30.5% from ZWL23.2 billion in 2020 to ZWL 30.3 billion. This is driven by the joint impact of real growth on core business assets and revaluation adjustments on fixed properties and investments. Loans and advances increased by 88% from ZWL3.8 billion as of 31 December 2020 to ZWLL7.1 billion as of 31 December 2021. The loans-to-deposit ratio closed at 44% whilst liquidity ratios were maintained above 45% throughout the year, exhibiting prudent balance sheet management in an otherwise challenging operating environment.
In 2022, during his last tenure at FCB, McSharry managed to secure notable gains including securing EUR12.5 million from European Investment Bank and declared a final dividend of ZW$127 cents per share.
Key events at the macro-economic level included bank policy rates madness which shoot to 200% from 60% and record currency depreciation of 85% at the end of 2022. It is against such a volatile environment where the Bank achieved a total income of ZWL36 billion and a profit of ZWL8 billion, although it depreciated from ZWL11 billion in 2021 with an asset base of ZWL60 billion.
Customer satisfaction
During his tenure, customer satisfaction and retention were one of the prioritised pillars. This is reflected in corporate governance (CSG) to be discussed below and further testified by an increase in deposits and net fee and commission income and the loan book. Customers borrow and deposit in banks they trust. From ZWL8 billion in 2020, deposits from customers shoot to ZWL93 billion while loans and advances to customers soared to ZWL8 billion in 2022 from ZWL12 million in 2020. An increase in loans and deposits means an increase in customer counts.
CSG
McSharry used CSG as one of the pillars for customer retention and attracting new customers. The Bank was vibrant in ploughing back profits and supporting local communities. In 2022, various projects which benefited the community were conducted including Junior Achievement Zimbabwe, a programme where twenty-one schools across the country participated, with a total of 200 students (124 females and 76 males) being mentored. The Bank said over 150 First Capital Bank colleagues participated in this initiative. Another project was the Global Money Week or the Train-the-Trainer Mentorship Programme where over 4000 students benefited. We Gotcha Mentorship Session also benefited a total of 75 graduates mentored by 10 colleague mentors. Lastly, the ZFU Chemhondoro Farming Input donation which comprised water pumps, diamond mesh wire, water tanks, fertilisers, and other farming implements benefited young farmers and more than 3000 students according to the Bank’s estimates. This shows how the Bank was determined to share profits with the community it serves.
Technology and Innovation
In terms of technological advancement and innovation, during his first year as an MD, the Bank within the Retail Banking space, McSharry introduced FCA’s first money transfer agency partnership with Ria Financial Services, offering customers a safe and secure channel to send and receive money internationally. The strategic partnership with Zimnat Insurance saw the launch of an inflation-sensitive funeral plan which has helped customers to retain value. Against 2019 performances, ATM services were resuscitated to allow customers to safely access cash services, thereby reducing footfall in branches. Infinipay was also introduced. This is a bulk payment platform, USD Lending, increased Capex facilities, Loyalty Lending, and Invoice Discounting.
In 2021, a new WhatsApp Banking platform, Alisa, was launched whilst customers were enabled to access Internet Banking and Mobile App using a reverse billing model to improve access and convenience. To facilitate better access to cash, and local and foreign currencies, the Bank increased its network of Automated Teller Machines in service whilst Bureau De Change services were rolled out across the network. Security enhancements were implemented on the VISA platform to give transacting customers a higher level of security assurance.
Risk management
The first thing to ululate for is the fact that McSharry never went through liquidation risk or s doubtful going concern. Liabilities were well managed and liquidity was ensured. Core capital targets were ensured on stipulated times mostly. As for risk management, since 2022, McSharry ensured a robust risk management scheme with the Bank meeting its tier 1 capital targets. In 2022, the Bank’s core capital stood at US$26 million at year-end compared to a regulatory target of US$30m required by 31 December 2021. However, the target was achieved earlier in 2021. During the year to 31 December 2021, at the level of US$75 million, the Bank met the minimum capital requirements for Tier 1 banks which was set at the Zimbabwe dollar equivalent of US$30 million, reckoned at the official rate, as of 31 December 2021. The capital requirement was also achieved in his last serving year, FY2022 achieving a translated total capital of US$61 million with core capital amounting to US$46.2 million.
In conclusion, McSharry leaves office as one of the most successful MDs at FCA having achieved tangible success. Profit percentage from 2020 to 2022 increased by 1600% from ZWL472 million to ZWL8 billion.
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