20 Sep 2023

Standard Chartered Bank Botswana recorded P241 million profit before tax in the 2023 half year results, the highest half year profits since 2014 with a growth of up to 239 per cent.

 Speaking during the release of the bank’s half year financial results in Gaborone Tuesday, the bank’s Chief Executive Officer, Mr Mpho Masupe, said this was achieved through solid income performance, growing by 30 per cent year on year with the growth coming from both underlying business momentum particularly in Corporate, Commercial and Institutional Banking (CCIB) and improving interest rate environment.

“The bank’s half year income closed at P523 million, up 30 per cent from the previous year, revealing a solid performance on margin income which recorded a decent year-on-year growth of 57 per cent. Our operating expenses were contained to an increase of 4 per cent due to increase in staff costs, which is reflective of the bank’s strategy to invest in sustainable human capital. Cost to income ratio improved from 75 per cent to 60 per cent,” Mr Masupe said.

He said the bank’s segments growth was evidence of how the bank was evolving to meet the client’s needs and its target to maintain double digit Return on Tangible Equity.

To that end, Mr Masupe said, the Consumer, Private & Business Banking segment (CPBB) delivered solid financial results, recording revenue growth of 17 percent to P329 million adding that CPBB continued to digitise by migrating clients to self-service digital platforms thus reported a digital adoption rate of 79 per cent in June 2023, from 70 per cent in June 2022.

The bank’s Chief Financial Officer, Ms Tapiwa Butale, said gross interest income closed at P561.4 million, up 41 per cent annually reflecting the benefits of growth of P1.3 billion asset growth in the corporate book .

She said the asset book increased by 15 per cent year-on-year largely due to facility utilization, highlighting that the bank’s strategic intention to drive short-term loans and targeted campaigns were expected to sustain the asset book growth.

“We maintained a resilient liquidity position over the period with a strategic focus on optimal deposit mix. Low cost deposit mobilisation is expected to gradually reduce the holding of expensive deposits,” she said.

The Non-Funded income (NFI), she said, declined by 8 per cent year-on-year to close at P153 million because of thin margins on foreign exchange sales driven by heightened competitive pricing in the market and subdued personal loan sales with a direct impact on insurance commission.

Ms Butale said the net interest income increased by 57 per cent to P370 million, with average interest earning assets growing by 2 per cent.

The growth in net interest income, she said, was also supported by strengthening margins, with net margin improving to 4.9 per cent from 3.2 per cent.

Ms Butale said consumer, private and business banking delivered a strong financial performance in the first half of the year 2023, underpinned by a solid revenue growth and excellent returns.

This notable growth was mainly driven by a substantial increase interest income, growing by 30 percent year-on-year supported by the higher interest rate environment.

She nonetheless said this was partly offset by a decline in fee income with a fee revenue decreased of 3 per cent year-on-year largely due to subdued wealth management income as momentum was impacted by market headwinds and competitive pricing.

As the only international bank in Botswana with investment advisory and multi asset investment platform, Ms Butale said the bank would continue onboarding additional mutual funds to offer a diversified portfolio to its clients.

To that effect, she highlighted that a new foreign exchange delivery capability allowing clients to transfer Chinese Yuan was also officially introduced to the market to continue to drive the Non-Funded Income (NFI) agenda through continued focus on the affluent and business banking segments.

“We successfully relaunched our affluent segment in the first half which saw us increase our relationship management team and refresh our client value proposition for the segment. This area will continue to be an area of focus, and growth for the bank going forward,” she said.

Ms Butale said the bank was also committed to digital transformation journey becoming the first bank in Botswana to process end to end trade financing and disbursement to clients on its platform. ENDs.