BancABC has announced a phenomenal set of results for the half year ended 30 June 2013 with the results largely driven by the substantial growth in retail banking during the period under review. Group pre-tax profits grew to P169 million, 77% up on the P96 million achieved in the prior year comparative period. Attributable profits of P143 million was 157% higher than P56 million achieved in 2012.
Total income for the period increased by 47% to P701 million from P476 million with growth being recorded in all major income lines. The Retail banking business provided the major impetus for the results. The vastly improved performance was essentially driven and bolstered by BancABC Botswana, BancABC Zambia and BancABC Zimbabwe, which have achieved critical mass in Retail banking and hence the three operations posted strong set of results.
Announcing the results, BancABC Group CEO, Douglas T Munatsi said the bank is extremely pleased with an outstanding set of results. “They accurately reflect the increasing strength of the Group’s operations. The good performance affirms the strategy that was taken a few years ago to convert the business from a purely wholesale bank to a universal bank.” The Group has expanded its branch network to 64 branches compared to 55 in the prior year.
Although total costs at P529 million were 40% higher than P379 million recorded in 2012 mainly due to the group’s continued expansion of its Retail footprint, group’s revenue is now growing faster than costs. Consequently, the cost to income ratio fell to 62% from 75% in prior year.
The group’s balance sheet grew to P13.7 billion (US$1.6 billion) compared to P13.4 billion (US $1.7 billion) in December 2012 and P10.8 billion (US $1.4 billion) as at 30 June 2012. Total Equity now stands at P 1.4 billion which positions the group to underwrite bigger ticket business. Loans and advances increased by P710 million to P9.9 billion from BWP9.1 billion as at 31 December 2012. Deposits increased to P10.9 billion from P10.7 billion in December 2012.
Discussing the regional operations of BancABC across the Southern African region, Munatsi said that the only operation which still had major challenges was BancABC Tanzania. The operation’s balance sheet had recently been restructured with all non-performing loans being warehoused in a non-bank subsidiary. At the same time the Group injected fresh capital. Therefore, the group is cautiously optimistic that its combined business in Tanzania will break even in the second half of 2013.
The group successfully raised US $70 million in additional lines of credit during the period. Fund raising efforts have continued and further funds are anticipated to be raised before the end of the year. The additional funding should ensure that the good performance experienced so far will be sustained.
BancABC Botswana recorded an increase of 127% in attributable profits. The exceptional performance was essentially driven by an increase in net interest income from the consumer lending and loan schemes in Retail banking. BancABC Mozambique’s profitability decreased by 32% from P14 million to P9 million in the current period. This was mainly due to an increase in impairments and higher operating expenses during the current year.
BancABC Zambia had a remarkable six months with profitability growing by 94% from BWP17 million in the prior year to BWP33 million in the current period. BancABC Zimbabwe’s attributable profits of BWP48 million was 3% lower than BWP50 million achieved in the prior year. This was mostly due to a BWP55 million impairment in respect of one customer. However, net interest income increased by 91% from BWP95 million in 2012 to BWP182 million in the current period.
Commenting on the outlook Munatsi said liquidity management and collecting of NPL’s will be major areas of focus for the rest of the year. “If we are successful in these two areas we expect the second half of the year to be stronger than the first and the full year outturn to be most favourable.”
In line with the Group’s dividend policy, an interim dividend of 14 Thebe (about 1.6 US cent) per share is being proposed. This will be paid on 13 September 2013 to shareholders on the company’s register on 30 August 2013.
ABC Holdings Limited is the parent company of a number of banks operating under the BancABC brand in Southern Africa, with operations in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe. A representative office as well as group management support services company is located in Johannesburg, South Africa.
ABC Holdings Limited is registered in Botswana which has a primary listing on the Botswana Stock Exchange and a secondary listing on the Zimbabwe Stock Exchange.
