First National Bank Botswana (FNBB) says it anticipates growth in targeted financing for some sectors of the economy such as agriculture, manufacturing and tourism, which will be supported by credit guarantees from development finance institutions.
FNBB Chief Executive Officer (CEO) Steven Bogatsu said NDP 11 also provides an opportunity for the private sector to fund more government projects. He stated that that despite the positive business sentiments, boosted by the increased business confidence, growth in secured lending facilities will continue to be hampered by the current pressures on the high value retail property sector and commercial office properties.
“As consumer indebtedness levels remain a concern the bank will continue to cautiously lend into this market,” said Bogatsu.
He further stated that the ongoing tight market liquidity position throughout the year resulted in an increased cost of accessing professional funding. Bogatsu said while they expect business credit growth to exceed growth in lending to households, they caution that total market credit growth is likely to remain muted at below 7.0 percent through to 2020. He added that with household disposable income under pressure, low credit appetite by government, and added that only a moderate increase in business production capacity, they expect that the drawdown on working capital facilities is likely to remain constrained.
FNBB’s financials for the year ended 30th June 2018 shows that the bank has maintained its deposit market share of just over 30 percent.
FNBB Chief Finance Officer (CEO) Luke Wood Ford said due to the bank having adopted a cautious credit-risk appetite, total gross advances grew by 4 percent year-on-year, compared to market credit growth of 7 percent.
Still during the same period, the bank recorded a customer deposit growth of 7 percent year-on-year which emanated predominantly from increases in current account as well as term and notice deposits.
FNBB’s Non-Interest Revenue grew by 9 percent. This is largely a result of increased transactional volumes, an inflationary increase in the service fees and growth in card usage.
Profit Before Tax (PBT) grew by 23percent year-on-year. Return on equity ended the year at 22.1 percent which is said to be above the bank’s internal target range of 18 percent to 22 percent. Stated is that a final dividend of 9 thebe per share has been declared for the year ended 30 June 2018. The dividend will be paid on or about 26 October 2018 to shareholders.