BancABC Records Declined Bank Charges

But had far stronger growth across most income lines in the second half of 2019.


Revenue made from transactional fess at BancABC has declined, the bank’s financials show.
Otherwise known as Non-Interest Income (NII), which is revenue made from charging customers in the banking sector language, BancABC recorded a P127 million in NII for the full year ending December 31 2019, which is a 5 percent decrease, compared to P133 million of the prior year.

NII is bank and creditor income derived primarily from fees, including deposit and transaction fees, insufficient fund (NSF) fees, annual fees, monthly account service charges, inactivity fees, as well as check and deposit slip fees.

“NII of P127 million was marginally lower on the back of weaker trading income,” says Finance Director for BancABC, Ratang Icho-Molebatsi. “This was supported by a strong growth in fees and commissions linked to lending activities. Transactional fees, which comprise of over a quater of overall NIR, declined by P4 million year-on-year as a result of introduction of more restrictive account dormancy rules in order to ensure inactive acccounts are closed faster.”

At P412 million, the bank’s interest income is 1 percent shy of the prior year’s performance. This was despite an 11 percent growth in loan and advances. This the bank that closed its 2019 loan book at P6.4 billon, a P630 million increase on the prior year. “This growth was predominantly from the retail banking segment which experienced 15 percent in its loan book,” Icho-Molebatsi explains. “However, commercial banking recorded a loan book decline of 14 percent year on year.”

BanABC recorded a Profit After Tax (PAT) of P122 million for the year under review, which is a 5 percent decrease, compared to P128 million of the prior year. The bank’s Maning Director, Kgotso Bannalotlhe, says the PAT nevertheless shows a rebound from the much slower first ha lf performance. He notes that the bank had far stronger growth across most income lines in the second half of the year.

Meanwhile, deposits from customers for the year under review totalled P6.7 billion as compared to P6.6 billion of the year ended 31 December 2018. “The bank’s deposit mix continued to be skewed towards term deposits. However, there was an improvement in the mix relative to 2018 as transactional deposits inccreased,” Molebatsi notes.
She says progress towards a more even deposit mix is anticipated following introduction of the BancOnline digital platform that will mainly focus on commercial digital banking.