Barclays Bank of Botswana (BBB), the biggest bank in the country, posted sterling year end results as pre-tax profits swelled 84 percent to P 543 million in a move that was aimed at erasing the bad memories of the collapse of the giant fuel and lubricants that nearly wiped its balance-sheet in the preceding year.
The results were bolstered by a number of factors; the falling out of Lobtrans from the calculations, pent-up consumer appetite for loans and the windfall from the Visa card that netted P 32 million.
In the previous year, Barclays lost P 92 millionÔÇönine fold its 2006 provision– which was largely blamed on the two companies that imploded towards the end of the year namely being the courier outfit, African Express and Lobtrans.
“The 2007 was a year of growth which saw us being in control of 60 percent of retail and commercial floor space in the country. We have opened sales and service centers in a number of places,” Chief Executive Officer of BBB, Thuli Johnson, said in April last year.
The bank currently has 106 ATMs in the country and the plan is that ultimately its ATMs will be able to take the deposits.
Further, for most part of last year, Barclays had been working on a new IT platform that is expected to position the bank against its peers.
The new platform will give it a superior band-width that will enhance the service deliveryÔÇöincluding cutting the loan application turn around period from 48 hours to 30 minutes.
The new system will also provide varied services, such as internet banking and cell-phone banking, which are believed will be introduced by early next year. That is also supported by the opening of branches in the most rural parts of the country, such as Ghantsi, among others.
According to the results to last December 31, the consumer loan rush at the now expanded branch networks was able to help it to pocket net interest earning of P 778 million against the P 555 million in the prior period.
“The net interest increased by 42 percent to P 788 million. Growth was driven by higher volumes in customer loansÔÇöa result of the retail expansion programme launched in 2007,” the company said, adding that consumer loans increased by 33 percent to P 5.2 billion.
The net fee and commissions jumped up by 35 percent to P 212 million reflecting an increased client activity in current accounts and continued growth in personal lending.
That helped the company’s earning per share to strengthen by 79 percent to 50 thebe against 28 thebe at the last reporting period.
“Barclays has delivered outstanding results in 2008, with profits 84 percent ahead of 2007 performance, despite the impact of the global financial crisis.
“Our focus on rapidÔÇöbut controlled ÔÇô growth, at the same time giving attention to governance, risk control, has seen Barclays Botswana perform very strongly,” Johnson said.
However, its outlook for the year was dim saying that consumers are expected to remain under pressure during the year due to the world economic melt-down adding that it is expecting some defaults on the household front.
The company declared a conservative divided of 11.7 thebe per share so that it can continue with its growth opportunities.