Saturday, September 19, 2020

FNBB records positive results despite challenges

The Chief Executive Officer of First National Bank of Botswana (FNBB) Group, Lorato Boakgomo-Ntakhwana, has indicated that despite challenging economic landscape, her organisation has recorded a good set of financial results for the full year ended June 2012.

According to the CEO, the Group’s financial position and profit before tax has increased by 8 percent and 14 percent, respectively.

She said due to the effect on changes to tax legislation in 2011 and the sluggish business environment, which impact negatively on the entire banking sector, profits after tax remained flat compared to the previous year.

The Group’s results indicate that after the direct taxation, which increased from P64 million to P161 million, profits dropped by 1 percent from around P574 million to around P569 million.

“The growth was lower than expected as a result of the current strain on the consumer and the relative liquidity in the market. The Group failed to reach the expected growth in consumer deposits and recorded an increase of 8 percent,” she said.

In order to reduce reliance on deposits, she revealed the bank will continue focussing on other segments for funding, such as total ordinary equity holders and cash and short term funds. Both funds grew by 33 percent and 50 percent, respectively, when compared to the prior year.

The CEO said advances to customers grew by 17 percent, mainly in property finance and in the wholesale segment. She added that on the back of the advances, net interest income grew by 16 percent and the achievement was made despite the adverse impact of the increase in the reserving requirements from 6.5 to 10 percent.

She noted that non-interest income increased by 24 percent on the back of increased usage of the Bank technology offerings, such as mobile and internet banking as well as growth in customer numbers. She said in order to cater for the risks in the bank strategy of growing assets in the retail space, the bank has adopted a conservative provisioning methodology.

Boakgomo-Ntakhwana expressed satisfaction with the results saying they are good given the challenging economic landscape.

“They reflect the aggressive steps we have been taking to strengthen the balance sheet and position the bank for long-term growth. There are challenges that lie ahead, but we are determined to be steadfast in our delivery of excellent financial solutions to our customers,” she said.

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