Stanbic Bank Botswana has defied the tough banking climate as it managed to produce sound financial results for the year ended 31 December 2015. The bank said the loan book was constrained on the back of challenging macro-economic environment, coupled by a slowdown in mining sector, business closures, and challenges in electricity and water supply.
The bank’s Chief Executive, Leina Gabaraane said the prevailing low business confidence resulted in a decline in the loan book growth. “This has naturally forced us to relook at our operational efficiencies and delivery of service to ensure that customers are sustainably delighted,” he added.
Gabaraane noted that it is no longer about the loan size or the number of customers, but more about the return on assets and the quality of every transaction that the bank enters into. According to the bank, its operating costs also increased by 5%–primarily as a result of investment in technology and building critical staff competencies.
Amidst all this, the bank elected to focus on operational efficiencies and service excellence, which resulted in a healthy growth of increased transactional volumes and non-interest revenue. “These results reflect the exceptional transactional capabilities the Bank has acquired since the implementation of the new core banking system in 2013. This system has allowed for the introduction of best-in-class digital value-added services to the market,” said Stanbic.
“The effective management of impairment was the highlight of the year, due to continued focus on rehabilitation, recoveries and revising risk appetite to align to current difficult market conditions. There were also some improvements in the quality of the loan book held and the quality of the securities held.”
According to Stanbic, the Corporate and Investment Banking (CIB) division continues to provide a strong anchor for operations, generating growth in revenues whilst the Personal and Business Banking (PBB) unit emerged stronger than in the previous year. This drove the healthy growth of 18% in non-interest revenue. While the loan book remained flat year-on-year, there was an enhancement of the risk profile of the book which provides a positive outlook for both units.
The collective effort and focus on excellence resulted in the bank posting profit after tax of P132 million. Total income increased to P700 million in 2015, and return on equity increased from 11% in 2014 to 14% in 2015. “Although the bank profits have improved, management remains concerned about the prevailing environment which demands continued prudency,” explained Gabaraane.
“We remain committed to Botswana and Africa. We continue to move our staff, our customers, our communities and our nation forward. We are resolute in this focus, and are pleased with the progress made thus far. We are committed to making progress, real and tangible, as we continue to fortify our customer confidence and improve their banking experience through relevant, innovative banking solutions,” added Gabaraane.