Access Bank Botswana continues to bear the brunt of its expansion strategy as profit dwindles, but the lender remains optimistic that the strategic moves puts it in a path for future growth.
The bank this week announced that its profit before tax for the financial year ended June 2023 is expected to reduce by about 50 to 60 percent compared to last year’s profit of P43 million. This means profitability will decrease by about P17.2 million to P21.5 million, resulting in this year’s profit coming at between P21.5 and P25.8 million.
Access Botswana’s board of directors attributed the fall in profitability to transformation and growth initiatives, marked by substantial investment in expansion enhancement of customer offerings which led to increased operational expenses.
“While this investment may reduce financial performance in this period, we affirm that these strategic moves were vital and have positioned Access Bank favourably for our imminent growth phase,” according to the directors.
The transformation included establishment of new service centres, substantial increase in the ATM network, and the introduction of the “Access Closa” agency model which extends the bank’s reach to areas without easy access to ATMs or service centres.
“We extend our gratitude to our customers for their unwavering support throughout this transformative journey. We have introduced pioneering products that underscore our commitment to innovation in Botswana’s banking sector. Notably, our ground-breaking offerings such as the “N’stakolle” loan, salary advance loan, and Access Africa have captured the market’s attention,” the directors said.
Access Bank Botswana morphed from the transaction in which Atlas Mara Limited and ABC Holdings Limited sold 78.15 percent of the issued share capital in BancABC-Botswana to Nigerian financial services conglomerate Access Bank Plc. Access Bank Botswana has been listed on the Botswana Stock Exchange (BSE) since December 2018, but the bank has been in operation in Botswana for approximately 30 years and has nine full service branches throughout the country, nine cashless service and 58 ATMs.
Access Botswana is focused on the execution of its five-year strategy, with the focus on rapidly expanding and diversifying its business. The strategy is centred on further enhancements to customer value proposition and expansion, particularly balance sheet optimization and increases to the distribution channels and product offering to the customers, according to the bank.
In June, Access Botswana issued a P2 billion domestic medium-term note programme on the BSE as part of efforts to grow its business. The bank intends to use the proceeds of the medium-term note programme to grow its retail and corporate segments, as well as the extension of the maturity profile of its liabilities to match assets.