Friday, July 12, 2024

FNBB leads commercial banking sector

First National Bank of Botswana (FNBB) punched the air on Tuesday as its half year results showed that it led the commercial banking sector to the period up until the end of December last year.

The bank’s assets shot up by 111.6 percent, guided by the Bank of Botswana Certificates (Bobcs), mortgages and corporate and retail loan book to brighten the faces of its investors.

According to the financial statement of December 31, 2006 interest income rose 99.3 percent to P 495 million from P 249 million last year. Earning for the period was P 143 million, compared to P 133 million, while lending was moving at a pace of 17.7 percent for the six months.

Danny Zandamela, the group managing director, said the performance was driven from many quarters but Bobcs and foreign exchange commission were the pillar of the growth.
The mortgage book was 30 percent up or P 1.3 billion to match Botswana Building Society (BBS).

“The net interest income increased by 26.1 percent compared to the corresponding period as a result of strong growth in interest income from advances which have grown 17.7 percent, compared to the corresponding period, and also as a result of the significant increase in the holding of Bank of Botswana Certificates (Bobcs), which increased by 502.3 percent on the corresponding period following the Bank of Botswana’s change in policy restricting Bobcs trading to commercial banks with effect from March 1, 2006,” Zandamela said.

He said the non interest income increased by 23.9 percent due to increased customer transactions that led to swelling in numbers of customer accounts. He stated that the move was made possible by the increase in the number of branches by building Kasane and River Walk Plaza to push their total number to 14.

The move, which is also complimented by the increase in the number of ATMs and Mini- ATMS, has led to an increased visibility of the bank.
“Both ATMs and the mini ATMs were increased significantly and our up time has increased to 97 percent,” Zandamela said.

Some of the plans which are expected to be introduced in the coming year include product innovations to try to help the bank’s market penetration against its peers. Lately, it rolled-out cell-phone banking which is one of the latest banking products across the world ÔÇô including in the advanced countries of Europe.

Praising the technology, Zandamela said “Cell-phone banking is a bank on the phone,” said Zandamela, praising the technology. “It allows a customer to do anything at anytime relating to account transactions.”

Zandamela was optimistic that interest rate cut was in the offing, given the declining inflation rate which came down to 7.4 percent by the beginning of the week.

“I do hope that there is a cut so that the economy can start kicking,” he said.

However, FNBB enjoyed a growth in the loan book compared to other banks but hopes that the mining boom in the northern part of the country will add steam to its book once it takes off.

Part of the growth came from First Funding which enjoyed support from the imported second hand cars but the bank last week said it still needed some product diversification to contribute more.
The bank managed to cut its cost income ratio from 35.9 percent to 33.4 percent. Its share price rallied from P 22.50 to P 23.50 over the week.

Meanwhile, Standard Chartered Bank of Botswana and African Banking Corporation are expected to come up with their results in the coming weeks. Both banks’ balance-sheets are expected to rely on Bobcs.


Read this week's paper