The First National Bank of Botswana (FNBB), the most innovative bank in the country, saw its interest income shooting over P 1 billion for the full year to end of June this year thanks to retail banking appetite over the period.
The bank warned the market at its announcement of its results on Friday that it is taking a long shot at rolling out some more creative products into the market ÔÇö including a more innovative mortgage scheme targeted towards the low cost houses ÔÇô which will be given a punch by an aggressive expansion programme.
“We will be opening some new branches across the country and an announcement will be made in the near future,” the company’s Chief Financial Officer, Stephen Bogatsu, said.
Last year, the bank said it was looking into the possibilities of opening branches in the major villages of the country in an attempt to bring banking closer to the people.
According to the financial statement to June 30, 2007 retail banking grew by a phenomenal 48 percent to off-set losses made on the foreign currency charge and the shrinking wholesale interest of the Bank of Botswana Certificates (BoBcs). Further, retail banking loan appetite was able to cushion the corporate sector’s sluggish performance which was largely hit by the high interest rate environment that prevailed for the most part of last year.
“Last year, we saw some of our corporate customers preferring to settle early because of the high interest rates and then going to borrow from South Africa. However, we are beginning to see some of them coming back since the interest rates started to pick up in South Africa,” Bogatsu said.
“Total assets have increased by 15.8 percents mainly as a result of 13.1 percent increase in advances and 8 percent increase in BoBcs. The growth in advances continues to be driven by property finance, retails banking and Wes bank division, which have performed exceptionally well as a result of various initiatives to improve process and services to customers,” the bank said in a statement.
The property loan book swelled to P 1.2 billion over the periodÔÇöadding to the total of 16.7 percent added by bank of Botswana’s initiative to appoint commercial banks to be the sole traders in BoBcs.
It further stated that the net interest jumped by 20.6 percent from P 288.3 million to P 347 million
The bank also stated that it was embolden by a boom in the mining sectorÔÇö especially in the north ÔÇô and it is aiming to take full advantage of the developments in that area with special emphasis on the copper mining.
It also indicated that the forex trading outside Debswana has remained steady despite the halt in price increases. Mid last year, the Botswana government announced receiving its dues from diamonds through commercial banks. However, it indicated that it will use the central bank instead. The currency will be converted to Pula as and when the situation demands.
FNBB’s results are to be used as a yardstick to gauge the performances of other banks given the fact that its assets have swelled to P 8 billionÔÇösame as Barclays, the largest bank in the country at the last reporting. It offered investors a dividend of 6.1 thebe per share an increase of 22 percent against the corresponding period.