Group CEO, Mr. Douglas Munatsi
BancABC has released yet another set of sterling results for the year ended December 31, 2013. The banking group continued to reap the benefits of its move into fully-fledged universal banking.
Business volumes have significantly increased across all banking segments resulting in a 49% growth in attributable earnings to BWP 198 million from BWP 133 million in 2012. Basic earnings per share (79.6 Thebe) were, however, only 10% higher (2012: 72.1 Thebe) due to the increased number of shares in issue following the rights issue that was concluded in July 2012 and the conversion of an IFC loan to equity during 2013.
“I am pleased to announce the Group’s strong performance in 2013 reflected in improved profitability, stronger balance sheet and better efficiency. We are particularly pleased by the solid performance by our subsidiaries in Botswana, Zambia and Zimbabwe,” said Group CEO Douglas Munatsi when announcing the results.
Group Net Interest Income of BWP 1,010 million was 50% higher than prior year. Non-interest income was 25% ahead of prior year. Total income of BWP 1,374 million was 26% above prior year. Pre-tax profits of BWP 254 million recorded for the year was a 20% improvement over the BWP 212 million achieved during 2012. The cost income ratio continued to improve to 66% against prior year of 71%. The only fly in the ointment was non-performing loans which ended the year at 9.8% against prior year NPLs of 9.2%.
The balance sheet increased to BWP 15.8 billion from BWP 13.4 billion as at 31 December 2012. With the exception of BancABC Tanzania, all the operations recorded growth in loans and advances.
A final dividend of 4.5 thebe (about 0.5 US cents) for the year ended 31 December 2013 has been declared. This brings the dividend for the full year to 18.5 Thebe (approx.. 2.1 US cents) per share. The final dividend will be paid on 2 May 2014 to shareholders on the Company’s register at the close of business on 18 April 2014.
The 2013 results were achieved on the back of continued expansion in the Group’s distribution network as well as a general rise in business volumes. By year end, an additional 12 branches had been added to the network bringing the bank’s presence in the 5 Countries to 73. In addition, strides were made in mobile money in Botswana, Tanzania, Zambia and Zimbabwe. In Botswana the Group is in a pioneering relationship with mobile operator Orange. The number of employees increased by 191 to 1,501.
BancABC Botswana’s net profit after tax at BWP 153 million was 62% higher (2012: BWP 94 million), due to an increase in net interest income as a result of higher margins recorded in consumer loans, which were of a significantly higher average level despite the fact that the total loan book only grew by 10% year-on-year.
BancABC Mozambique’s performance was hindered by higher loan impairments as a result of a single sizable exposure.
BancABC Tanzania continues to be a major challenge for the Group and the two subsidiaries in that market recorded impairments of BWP 135 million for the year under review. As a result both operations recorded substantial losses for the period under review. An aggressive approach has been taken on impairments and recoveries will only be accounted for on receipt of cash. It is anticipated that it will take between 12 and 24 months to achieve the desired turnaround.
BancABC Zambia posted attributable profit of BWP 50 million which was 39% up on BWP 36 million recorded in 2012. Business volumes in consumer loans as well as non–funded transactions were the major drivers of this performance.
BancABC Zimbabwe’s attributable profit of BWP 118 million was 14% up on the BWP 103 million recorded in 2012, despite profitability being adversely affected by high impairments, which increased to BWP 92 million compared to BWP 41 million in 2012. The impairments were a direct result of the liquidity situation in the country.
“The one tonne Gorilla we have to tackle is NPLs. The Group has channelled significant resources to credit management and recoveries to address this issue aggressively in 2014 and beyond. We are confident this matter will be addressed,” Looking forward, Munatsi said.
“We expect growth to continue across most of our operations, but at a moderate pace than that previously recorded as the retail banking operations have now reaching critical mass in Botswana, Zambia and Zimbabwe. Liquidity remains a challenge which we are continuously addressing through improved deposit mobilisation and accessing debt capital markets and lines of credit.
“The Group balance sheet remains strong and is well positioned for further growth in 2014”.
