The First National Bank Botswana (FNBB), the fastest growing and most innovative bank in the country, posted sterling that showed an improvement in the nonÔÇôinterest income up by 25.2 percent while income before tax stood 17 percent stronger to end of December.
According to the financial statement released after the stock exchange closing period profit after tax was 17 percent better at P 167.4 million against the corresponding P 143 million.
Speaking at the FNBB Interim Result Announcement held at Gaborone Sun, FNBB Chief Financial Officer Steven Bogatsu explained that the non-interest revenue was driven largely by strong growth in new customer accounts.
“This was also driven by the increased transaction volumes through increased utilization by customers of the Bank’s superior delivery channels, particularly our electronic delivery channels,” he added.
The bank also showed some strength on the net interest income despite a savage interest margin compression brought about by the lending rate cut last year June which reduced yields on Bank of Botswana Certificate (BoBCs).
A new platform for card acquiring, which was successfully implemented, has significantly enhanced service delivery and product offering to customers, resulting in strong growth in this business.
FNBB is the leading bank in terms of credit card issuance and has just bolstered that with saving’s account ATM cards. Another innovative idea which is still at infancy state, the cell phone banking, also showed some impressive growth.
The bank’s assets increased by 28.2 percent to P 10. 2 billion up from nearly P 8 billion last year. The move was driven by an increase in advances and investment securities, mainly BoBCs holding which increased by 30.6 percent.
“The growth in advances continues to be driven by WesBank and Retail Banking division, through various business promotion programmes,” he said.
FNBB’s deposit book grew by 30.8 percent to P 8.9 billion from P 6.8 billion by the close of 2006.
He said they still continue to attract more of both local and foreign currency deposits through their wide range of savings and term deposit products. The results showed that the return on shareholders funds, based on average balances including the dividend reserve, has also improved from 50.5 percent in 2006 to 58.5 percent.
During the period under review, FNBB embarked on its radical expansion programme with the opening of two branches in Selibe-Phikwe and Serowe. This expansion, together with the introduction of a new treasury system, has impacted on costs resulting in a 29 percent increase in operating expanses during the period.
FNBB Chief Executive Officer, Danny Zandamela, said newly launched braches at Kasane and RiverWalk, have managed to break-even. However, this growth in operating expenses, according to the FNNB report, is in line with management expectations and it gives access to new revenue streams and improved processes.
FNBB is sitting on a lot of money with its capital adequacy ratio having increased to 17.46 percent last year on the 31st of December, from 16.7 percent in December of 2006, which is more than three percent higher than the central bank’s requirement.
The bank also made some impressive developments on its bad debt provision slowing it down by 15 percent from the corresponding period of P 15 million and it declared a dividend of 450 thebe per share to be paid by March 21.