Tuesday, March 5, 2024

Five Thebe per share for FNBB shareholders

Commensurate with the anticipated impact of regulatory and accounting changes on the Bank’s profitability, the directors of the First National Bank Botswana (FNBB) this week said that it is appropriate to continue with the prudent approach to the bank’s capital management.

As a result, the bank’s Chief Financial Officer Makgau Dibakwane said on Wednesday that FNBB has proposed an interim dividend of 5.0 thebe per share for its shareholders.

According to Dibakwane FNBB undertakes a forward-looking approach in the capital planning process considering the organic growth requirements, safety margin for unexpected fluctuations in business plans and volatile earnings brought on by fair value accounting.

“Through this approach, compliance with Bank of Botswana capital adequacy requirements can be ascertained, shareholders’ returns can be safeguarded, and the Bank can maintain the ability to continue as a going concern even under severe stress conditions”, said Dibakwane in the capital Gaborone.

FNBB’s interim results for the period ending 31 December 2017 shows that its Net interest income before impairments recorded a muted growth of 2 percent, indicative of margin squeeze in a low-interest environment.

In its last sitting, the central Bank’s Monetary Policy Committee (MPC) maintained the policy rate at 5 percent citing positive price stability.

Available figures shows that Botswana’s banking sector recorded lower credit growth during 2017. The BOB’s 2018 Monetary Policy Statement released on Tuesday shows that annual growth in commercial banks credit decreased from 6.2 percent in 2016 to 5.6 percent in 2017.

The slowdown in annual credit expansion has been mostly associated with a decrease in growth of lending to businesses from 4.2 percent in December 2016 to 3.2 percent in December 2017.

Meanwhile FNBB’s Profit before tax grew by 9 percent year-on-year driven by reduction in impairments as well as strong non-interest revenue growth. The bank’s non interest income grew by 10 percent. The bank’s financials shows that its impairment charge ratio for the period improved from 2 percent in the prior year to 1.6 percent as at December 2017.


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