11 Sep 2019

 

 Barclays Bank Botswana half year financial results  have revealed a 49 per cent growth of profits before tax.

The growth has been attributed to  growth in income as well as contained cost and favourable credit losses. 

This was revealed by the bank’s financial manager, Mr Mumba Kalifunga at the bank’s half year financial results presentation on September 10.

Mr Kalifunga said they achieved a profit before tax of P387 million on statutory basis, representing growth of 49 per cent year-on-year.

He further said that their total revenue, which was propelled by balance sheet growth and an increase in fees and commission income, was up year-on-year by P67 million.

“We continued to drive momentum across all our key segments to negate the effects of compressed margins arising from an increase in cost of funding,” he said.

He also said that net income increased by eight per cent, mainly driven by balance sheet growth, adding that consequently the business remained resilient in its selected market segments and continued to drive credit growth.

Mr Kalifunga said the new strategy that they launched last year to achieve cost to income ratio of lower 50’s, was on point as their operating costs were well contained with the business achieving a cost to income ratio of 53 per cent for the period.

He further said credit losses decreased by 110 per cent in comparison to the previous year, with an overall recovery of P8 million.

“A significant recovery from one of our corporate clients contributed to the sated performance, removing the effect of this recovery our credit loss charge reflected a positive improvement of 32 per cent,” Mr Kalifunga said.

He said that in addition to the corporate recovery, their enhanced collections capability and conservative credit extension to high risk sectors also contributed to the favourable credit losses. “The strong growth dynamic observed in the first half of the year demonstrates the validity of our strategy to upscale and expand our services and our constant attentiveness to our clients and their needs,” he added.

Mr Kalifunga said their customer liabilities increased by seven per cent to P13 billion from P12 billion, driven by a positive growth across all their business segments.

He said that their balance sheet position remained solid at a total financial position of P17.9 billion, with strong liquidity and capital adequacy levels and regulatory capital position standing at P2.5 billion.

“This represented a ratio of 18.3 per cent against the regulatory limit of 15 per cent and liquid assets ratio, which were well above the regulatory minimum of 10 per cent,” he said.

Barclays Bank Botswana Managing Director, Ms Keabetswe Pheko-Moshagane said that despite the challenging environment they were operating in, they had achieved positive financial results with many positive under-lying trends, which propelled their growth.

She said that their growth ambition had been realised by offering seamless and optimal solutions to their customers, and remaining committed to putting the customer at the centre of everything they did.

“Amongst our achievements, we have launched the Bulk Mobile Disbursement in June this year and it offers corporate clients the convenience of making bulk payments to both Orange Money and My Zaka mobile wallets,” she said.

She said that they also released Integrated Cash Deposit, which is a hybrid automated Cash-In-Transit solution introduced by the bank in partnership with their strategic security services partner G4S, to enhance convenience and security to larger cash handling corporates.

She said the local economy had been resilient in the first few months of the year, rising by 4.3 per cent in the first quarter of 2019.

She however, said that despite the promising start to the New Year, they expected real Gross Domestic Product (GDP) growth to slow down to 3.9 per cent this year from the 4.5 per cent realised in 2018, as both the mining and non-mining sectors experienced a more challenging environment.

Ms Pheko-Moshagane said the SACU revenue pool projections were also likely to disappoint over the medium term due to the economic risks facing the South African economy and continued weak GDP growth performance. ENDS