Absa Bank Botswana achieves growth
17 Sep 2023
This year started with a positive trading tones as the local economy posted easing inflation numbers, reflecting an improvement from last year.
This positive development led to Absa Bank Botswana benefitting handsomely as it achieved a 13 per cent growth in profit before tax during the half-year period under review, with total aggregate revenue growth of 17 per cent for the comparative period.
Presenting the financial results for the six-month period for Absa Bank Botswana on Thursday, the managing director Ms Keabetswe Pheko-Moshagane said that this was on the onset of improvements in the supply chain challenges resulting from the Russian-Ukraine conflict, thereby enabling ease of doing business.
She said although the cost of funding remained higher during the period under review, net interest income still grew double digits due to improved performance of customer loans and trading portfolio assets.
“Our strategic intent to drive fee income has paid off, and this growth was boosted by the digital drive and adoption, coupled with a significant rise in transactional volumes across all client segments for the period under review.
For this period operating costs remained under control and expected credit losses continued to post good performance on account of the quality of assets and effective credit loss mitigation strategies,” she said.
Ms Pheko-Moshagane also said that the bank’s balance sheet remained solid and on an upward trajectory. She said with a total financial position in excess of P23 billion, Absa Bank Botswana has grown by two per cent, putting it in a place to support future growth.
She said customer loans and advances grew by five per cent, and hailed the bank’s retail banking, which enabled the bank to remain resilient as it continued to deliver relevant and innovative solutions.
“The performance of the retail bank was encouraging, with revenue continuing to be meaningful to the overall bank performance.
Our retail banking revenue grew by eight per cent, with interest income and non-interest income registering a six per cent and 11 per cent growth, respectively.
Loans and advances grew by 11 per cent while customer deposits grew by four per cent at the back of strategic initiatives to promote a savings culture despite pressure on household income,” she said.
She said in an effort to drive inclusive banking, Absa Bank Botswana launched a market-first payments solution called Mobi Tap which allows merchants and Small, Medium and Micro Enterprises (SMMEs) to use their phones in place of traditional Point-of-Sale (POS) devices to process contactless card transactions. She said that they also launched a Motshelo loan to provide access to funding for group savers.
“We believe that digitization is a key cornerstone for banking in the future and therefore we have a clear intention to grow our self-service capability,” she said.
In line with encouraging customers to adopt and use the digital channels, she said the bank saw its digital uptake increasing significantly.
In support of the agricultural sector, Ms Pheko-Moshagane said that Absa Bank Botswana continued to be a partner and sponsor for various farmers’ events and field days across the country, such as Mookane, Sandveld and Voorslag field days.
Looking ahead, she said that Absa Bank would continue to monitor the economic headwinds, especially the geopolitical tensions that could negatively impact Botswana’s growth, which is expected to hover around four per cent.
She said inflation was also expected to average 4.9 per cent in 2023, which would be within the Central Bank’s objective range.
She said this would be achieved by continued investment in training and development programmes aimed at equipping employees with skills and mindset to enable them to come up with solutions for customer’s future needs. ENDS
Source : BOPA
Author : Olekantse Sennamose
Location : GABORONE
Event : Presenting financial results for the six-month period for ABSA Bank Botswana
Date : 17 Sep 2023