First National Bank Botswana (FNBB), the country’s largest commercial bank, has disclosed that its interim profit will be higher, providing another boost for the bank which might become the first bank in Botswana to register P1 billion in profit.
In the latest market update, FNBB says its pre-tax profit for the half year ended December 2019 will increase by between 10 percent and 20 percent, which could be an addition of between P48 million and P72 million to 2018’s interim pre-tax profit of P481 million, and using the lowest rung of the estimate, FNBB is looking at raking in P529 million profit, all in six months.
The bank which boasts of the largest clientele and a huge balance sheet is riding on a momentum that began two years ago. Business boomed for FNBB in 2019, bringing in the all-time high P945.3 million in profit before tax for the year ended June 2019, up from P838 million in 2018.
With the half year results already reflecting growth, available figures show that FNBB might achieve another record setting profit for 2020, with estimates as high as a P1 billion pre-tax profit, fuelled by strong performance in the banking industry.
The Botswana banking sector defied 2019’s headwinds that slowed other sectors, with commercial banks experiencing growth in assets and income. According to Bank of Botswana’s November Financial Statistics, the total credit extended by banks was P61.6 billion in October and making it the largest outstanding credit in the history of the country.
The growth in credit was not only supported by increases in civil service salaries but also from loanable funds as deposits also reached record highs. Total deposits held by banks jumped to P75.4 billion in November – a new record in the local banking industry for the biggest deposits held by banks.
On the back of that growth, the ten registered commercial banks raked in a cumulative of P1.28 billion in the last three quarters of the year. With figures for the fourth quater yet to be published, it is probable that the banks’ cumulative profit in 2019 will be higher than 2018’s recorded P2 billion.
Insiders have intimated that the growth experienced in the banking sector this year might surpass 2018’s profits, setting in a new record as banks show no signs of slowing down despite headwinds in the economy, and intensifying competition among the banks.