BancABC continues upward trajectory

4483
72966

The Botswana business has come to lead Banc ABC’s profit contribution as the bank continues its bullish run in the financial industry. According to the bank’s half year results,out of the five countries they currently operate in, Mozambique, Tanzania,Zambia, Zimbabwe, Botswana operations took over from Zimbabwe as the largest profit contributor, on a year to year comparison, with the local business having generated 47% of profits compared to the 32% realised in the previous year. “Banc ABC Botswana recorded an increase of 127%in attributable profits.

 

The exceptional performance was essentially driven by an increase in net interest income from the consumer lending and loan schemes in Retail banking,” read a press release from the bank. The operations in Zambia also showed tremendous growth as profit shot up by 94% to P33 million in the first six months of the year. BancABC made it known last year that they will expand their retail banking business aggressively while also operating the wholesale banking. The move has paid healthy dividends as the results show that their Retail banking business contributed 51% to operation in the period under review , up from39% on a year to year basis.Total income for the period increased by 47% to P701 million fromP476 million with growth being recorded in all major income lines. The Retail banking business provided the major impetus for the results, according to the results presentation.

 

BancABC Group CEO, Douglas Munatsi commented on the impressive results stating that, “we are extremely pleased with an outstanding set of results.They accurately reflect the increasing strength of the Group’s operations. The good performance affirms the strategy that was taken a few years ago to convert the business from a purely wholesale bank to a universal bank,” he said However the expansion has come with costs as expected. The results show that Retail banking costs had increased by 79% and wholesale costs up by 14%. This was largely driven by the increased staffing cost as the bank said staff complement increased by 131 in the retail banking division,wholesale banking up by 49 staff thus taking the total staff to 1,391 in all of the operations.

 

Three clients managed to contribute to more than 80% of the group’s impairments. According to the bank the three clients contributed 88%of the charge with one each from Mozambique,Tanzania and Zimbabwe.The half year results show net nonperforming loans of 4.1% compared to6.1% at year end but higher than 2.1%recorded in the first half of 2012. The bank has proposed an interim dividend of 14 thebe subject to approval. The bank’s stock on the Botswana Stock Exchange gained 3.1% last week on the back drop of the results announcement to 505 thebe.