- Profit before tax grows by more than 100%
- Chops operating expenses by P37 million
- Board declares P83 million dividend
Leading financial services operator, Absa Bank Botswana Limited, has defied the COVID-19 pandemic to post a remarkable performance for the period ended 30 June 2021.
This is after the bank’s profit before tax increased by 125 percent from P128.8 million in 30 June 2020 to P290.3 million in the period under review.
According to Absa, the impressive performance was driven mainly by the positive performance of the impairment line together with a positive momentum on cost lines. The bank’s operating costs remained well contained on a reducing trend compared to prior year. On a statutory basis, operating expenses totalled P460 million in the period under review, representing a 7 percent decrease from P497 million reported on 30 June 2020.
“This was achieved by an overall reduction in spend as we continue to leverage on a leaner, rotational and digitally-led operating model,” the bank said in its financials released recently. “Costs in the current year have benefited from the absence of Voluntary Staff Separation exercise that happened in the first half of 2020, together with a significant reduction in separation expenses as the rebranding exercise has been completed. Our cost-to- income ratio declined 4 percent and ended at 58 percent for the period under review.”
This the bank that saw its balance sheet grow by 14 percent with customer loans and deposits remaining key components of the balance sheet and key drivers of balance sheet growth. “Our balance sheet position remains solid at a total financial position of P21.5 billion,” the bank announced. “Customer loans grew by 9 percent year-on-year to P14.8 billion. We have seen increased momentum in our loan conversion rates, especially in RBB where growth was driven by scheme loans, mortgage loans and Enterprise Supply-chain Development (ESD) loans. This growth is in line with our strategy to continue to lend a hand to our customers who need support during this period and support the initiatives around the citizen economic empowerment and economic diversification.”
Absa customer deposits registered a pleasing momentum, growing by 15 percent in comparison to the same period last year, reaching P16 billion as at 30 June 2021. “Although we have seen tightening liquidity in the market, our client penetration, acquisition and retention strategy has borne much fruit, especially in our CIB segment. We have noted a stable upward trend in our deposit book, a momentum which is expected to last into the rest of the months of 2021,” the bank said.
Meanwhile, the Absa board approved an interim dividend of 9.74 thebe per share, amounting to a total dividend of P83 million.