BY KABELO SEITSHIRO
Given the current positive outlook for the Botswana economy, the First National Bank Botswana (FNBB) says it anticipates increased business activity and commensurate growth in the domestic market.
FNBB Chief Executive – Steven Bogatsu said last week when presenting the bank’s financials that the they further anticipates growth in targeted financing for some sectors of the economy such as agriculture, manufacturing and tourism.
These sectors, Bogatsu said are sectors expected to be supported by credit guarantees from development finance institutions.
FNBB’s recently released financial results shows that for the interim financial year ended 31 December 2018 the bank continued to operate above the regulatory minimum capital adequacy ratios.
As at the end of the interim period, the total capital adequacy ratio was 18.18 percent which is above the regulatory minimum of 15.00 percent.
The bank’s Profit After Tax (PAT) grew by 9 percent from P346 million to P378 million for the six months ended 31 December 2018.
At the same time, the bank’s impairments went up by 23 percent P127 million to P156 million for the six months ended 31 December 2018. Advances to customers grew by 3 percent from P15.1 billion from the previous period to P15. 5 billion for the year ended December 2018.
A look into the Non-Performing Loans (NPL) to gross advances ratio increased from 6.6 percent to 7.6 percent year-on-year, with the NPL exposure increasing to P1.26 billion and the bank stated that this significant growth in NPLs is largely due to the deterioration of certain high-value FNB Business segment exposures, and the relegations that have been experienced.
Non-Interest Revenue on the other hand registered a growth of 10 percent and was driven by increases in both foreign exchange revenue and transactional revenue,
Meanwhile FNBB Chief Finance Officer – Luke Woodford said the FNB Retail segment growth was aligned to the bank’s cautious outlook on consumer lending, and experienced balanced growth in both property loans and personal loans, while the RMB Corporate segment growth was attributed to a small volume of large-value transactions. He added that the FNB Business decline in advances was attributed to increased competition, the internally moderated risk appetite and the high amortisation of the portfolio due to the predominance of amortising term loans in the portfolio.
“The position subsequently normalised and the Bank maintained its funding profile and careful management of liquidity risk and costs over the current period,” said Woodford.