Saturday, September 25, 2021

Botswana, Zambia and Zimbabwe help ABC Holdings weather storm

The three SADC neighbours of Botswana, Zambia and Zimbabwe have been praised for helping ABC Holdings navigate tough trading environment to report better results that could have been worse.

The other subsidiaries for the pan African bank, namely BancABC Mozambique and Tanzania, saw retail offering failing to gain traction with a raft of challenges ranging from tedious litigation processes to increased impairments.

“We are growing our market share, especially Botswana and Zimbabwe. This is something that reflects how much we have grown,” said Francis Dzanya, the bank’s Chief Operating Officer.

“The market share we have grown significantly is Zambia.” Botswana and Zimbabwe contributed positively to the group’s bottom line with each contributing P103 million and P94 million, respectively.

“The net interest income is very positive and it is largely driven by Zambia and this is where we are successful in the retail space,” added Beki Moyo, the group’s Chief Financial Officer.

The domestic trading environment is still conducive for the banking sector with BancABC Botswana creating a niche for itself by 100 percent mortgages—a move which is now the envy for peers.
The Botswana interest rates have been fixed since December 2010 to support economic recovery and encourage companies to borrow money for expansion.

Equally, Zambia delivered a solid performance buoyed by Bank of Zambia’s (BoZ) move to curb interest rates. “The traction is there. This is the market that is always intriguing us,” Dzanya said.

There are 17 small banks competing for P2 billion with BancABC Zambia part of the mix.
The Zimbabwe subsidiary is making inroads into group loan schemes, which pushed attributable profit up. However, challenges still exist in Zimbabwe where blue chips of yesteryears are struggling to adapt to the dollarisation of the economy. Moyo said BancABC Zimbabwe also faces liquidity difficulties because even big corporates (3-4 of them) are struggling to pay.

“We expect the liquidity situation (in Zimbabwe) to remain tight into the foreseeable future as there is effectively no lender of last resort and imports are higher than exports,” the bank said.

The Mozambique performance was below par and International Finance Corporation (IDC) is helping the subsidiary come up with a Small, Medium Enterprises (SME) strategy. Debits cards will be rolled out and the hope is that it will start “churning the goods” in 2013 following the expansion of branches.

Impairments remain a challenge in Tanzania where it is difficult to foreclose on accounts. “We are finding the legal process to be slow unlike other markets,” said Dzanya, adding that the bank will focus on deduction code it has secured.

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