BancABC last week announced a satisfying set of strong results for the half year ended 30 June 2012. The impressive results were largely driven by significant growth in income on the back of the expansion into retail banking.
Announcing the interim results, Group CEO, Douglas Munatsi, said that good results were achieved across the entire spectrum of BancABC’s activities except for BancABC Tanzania, which recorded a reduction in income and, as a consequence, posted a loss for the period.
Pre-tax profits grew to P96 million, 53 percent up on the P63 million achieved in the comparative period. Attributable profit of P56 million was 49 percent higher than P37 million achieved in 2011.
The results showed that total income for the period increased by 53 percent to P476 million from P311 million with growth being recorded in all major income lines.
BancABC’s retail network grew to 55 branches from 35 at the end of June 2011. Moreover, total retail customer numbers also grew significantly during this period by 144 percent to 155,763 from 63,891 in June 2011.
Total costs at P379 million were 55 percent higher than P244 million recorded in 2011 largely due to the expansion into retail banking. Notwithstanding the above, the Group is still confident that the cost to income ratio target of 50 percent should be achievable in the next few years.
The Group’s balance sheet grew by 18 percent to P10.8 billion from P9.2 billion in December 2011 and by 47 percent from P7.4 billion in June 2011. Total Equity moved positively by 9 percent to P666 million from P613 million in December 2011 and by 42 percent from P469 million in June 2011.
Loans and advances grew strongly by 29 percent to P7.8 billion from P6.1 billion in December 2011 and by 95 percent from P4 billion in June 2011, mostly due to Botswana’s performance. Deposits increased by 19 percent to P8.8 billion from P7.4 billion in December 2011 and by 46 percent from P6 billion in June 2011.
The Group also recently announced that US $50 million was successfully raised through the Rights Offer which concluded end July 2012. Following the capital raise all the banking subsidiaries will either be in the top tier or upper second tier of banks in the various countries that the Group operates in.
Discussing the regional operations of BancABC across the sub-Saharan region, Munatsi said that the only exception to an excellent operational performance had been Tanzania, which posted a loss of P5 million. This was due to a reduction in net interest margins owing to a significant increase in deposit rates at the end of 2011 and beginning of 2012. The higher cost of money could not be entirely passed on to the borrowers.
BancABC Botswana recorded an increase of 228 percent in attributable profits. The outstanding performance was driven predominantly by an increase in net interest income from the increased payroll deduction loans in the consumer lending segment. BancABC Mozambique’s performance was satisfactory with an increase of 77 percent in profitability in this period.
BancABC Zambia posted a noteworthy performance due primarily to increased activity in the consumer lending segment and in non-funded trade finance transactions in the wholesale banking division. BancABC Zimbabwe continued its growth trajectory though at a lower rate due to business growth being hampered by market liquidity challenges.
Looking ahead, Munatsi said the Group was well-placed to continue on its growth path. “The additional capital that we have raised coupled with the growth in the middle class consumer segment will ensure that the growth we have seen in the recent past will be sustained,” he said.
In line with the Group’s dividend policy, an interim dividend of 8 Thebe (about 1 US cent) per share is being proposed. This will be paid on 21 September 2012 to shareholders on the register on 7 September 2012.