Barclays Bank of Botswana has achieved a Profit Before Tax (PBT) of P494 million for the year ended December 31, 2016, representing a growth of 49 percent from P332 for the same period in December 2015.
The exceptional growth took place despite the headwinds that the financial services industry and the country as a whole faced during 2016.
The bank’s strong performance was mainly driven by sustained revenue growth in the retail and Business Banking (RBB) segments which grew by 11 percent, as well as significant growth of 30 percent in the Corporate and Investment Banking (CIB) segment.
The bank’s headline earnings are up by 49 percent at P494 470 million from P332 185 million in 2015 while net interest income increased by 9 percent year-on-year at P 994 100 million from P 909 904 million in 2015.
A look into the net fee and commission income reveals that it increased by 16 percent year-on-year in 2016 by P313 169 million and P270 219 million in 2015.
Barclays Bank Botswana Managing Director (MD) Reinette van der Merwe said given the economic environment and the company’s current performance, Barclays Bank of Botswana is undertaking a set of actions to drive value creation over time.
She added that the focus on certain sectors of the economy would be important contributors to its strategy of improving product portfolio and financial performance.
“We believe that as we continue our journey to foster comprehensive, cutting-edge financial solutions, we ultimately simplify and improve the customer experience, achieving our goal to be the “Bank of Choice” in Botswana,” said Van der Merwe.
She further spoke of Bank of Botswana Monetary Policy Committee reducing the Bank Rate by 50 basis points in August 2016 to 5.5 percent, adding that as a result, the Banks’ Prime Rate reduced from 7.5 percent to 7.0 percent in Q3 2016. She said they expect monetary policy to remain unchanged for most of 2017 as economic growth remains fragile.
“Invest for the future with a focus on technology infrastructure, digital channels and customised products, with a view to giving our clients a seamless and pleasant experience across our platforms,” she stated.
Barclays Bank Botswana Finance Director Mumba Kalifungwa said the balance sheet growth is 5 percent year-on-year sitting at P15 387 894 billion from P14 654 285 billion in 2015.
He spoke of credit impairments increasing by 7 percent year-on-year at P261 969 million from P244 231 million in 2015
“We maintained cost control. Our operating costs increased marginally by 3 percent, remaining well contained with an improved cost to income ratio at 49 percent, down from 55 percent in the previous year. For 2016, it is at P732 452 million while in 2015 was at P709 814 million,” said Kalifungwa.
The bank’s return on equity increased to 22.3 percent from 16.9 percent, underpinned by the strong growth which is further evidence of the momentum they are believed to be building. For December 2016 return on equity is 22 percent with Total equity attributable to equity holders at P1 743 825 billion while total profit for the period is P389 244 million.
For 2015 return on equity was at 16.9 percent with a total equity attributable to equity holders at P1 743 825 billion while Total profit for the period was at P260 501 million.
“This strong performance was mainly driven by significant growth of 30 percent, in our Corporate and Investment Banking (CIB) segment and positive growth in our Retail and Business Banking (RBB) segment of 11 percent. For 2016 we are at P1 050 498 billion from P949 189 million in 2105,” he stated.
The bank has declared a final dividend of 14.669 Thebe per share for the year ended December 31, 2016 subject to regulatory approval.