Saturday, March 25, 2023

FNBB ups stakes in retail banking stampede

First National Bank of Botswana (FNBB), the bell-weather of the banking sector in the country, gave indications that the worst is over as it slammed onto an acceleration pedal aimed at doubling its retail market share under its new plans.

FNBB Finance Director, Steve Bogatsu, said he is “more optimistic about the recovery” and broke away from the long standing conservative stance regarding personal loan and advances as he pointed out their ambition is to double their market share.

His upbeat mood comes amid concerns that the USAÔÇöthe main consumer of the world’s┬ádiamondsÔÇömight plunge into a zig-zag recession mood in the light of the latest developments.

“Yes, the USA is the main consumer of diamonds, but we also have some health recoveries in Europe, China and India,” he said, referring to concerns over the status of the USA economy, which some economists say is in doubt.

“Of course, we do not expect everything to be smooth. Things are likely to be bumpy here and there, but, generally I am optimistic about recovery,” he added.

The upbeat mood expressed by FNBB is expected to be underpinned by a raft of products roll-out that is geared towards re-positioning it against its peers in the market.

Although the central bank’s┬á effectiveness towards┬á reigning in inflation is┬á not┬á all that convincing, commercial banks seems to be preparing for retail sector loan advances race after the worst recession┬á since records began in 1975.

“We are currently at around 16 percent of the market share in the retail banking business. Ideally, a bank of our size should be at around 30 percent and that is what we will be working towards,”┬áBogatsu said.

FNBB belongs to the club of “four” biggest banks in terms of market share; they control 94 percent of the market share. The four are: Barclays Bank of Botswana, FNBB, Standard Chartered Bank of Botswana and Stanbic Bank of Botswana.

The turn-around in FNBB strategy comes at a time when a number of commercial banks, including BancABC, have entered the retail banking space and it is also looking at increasing its share from three percent to a much higher figure.

Announcing the full year results to the end of June  2010 on Friday at the GICC, the bank indicated that although its revenues were sluggish  than in the previous comparable period,  other key factors, such as profit after tax and earnings per share, were stronger, which is in line with what they were looking for.

Profit after tax for the year was seven percent faster or at P 436 million compared to profit before tax, which was flat at P 532 million from P 528 million in the previous year.
Bogatsu praised the bank for 25 percent growth on loans and advances over the period ÔÇô the figure that was largely driven by retail division in the form of personal┬á and housing loans┬á and distantly supported by WesbankÔÇöcar loan division.

However, the larger part of the 25 percent occurred in the last part of the year and was denied the opportunity to steal the limelight on the balance-sheet.
Non interest transactions move up by 10 percent┬áor P 408 million over the year showing the bank’s┬ácreativity┬áin trying to move away from over reliance on┬áincome generated through loans and advances.

Deposits stood at┬á P 10 billion and total assets were at P 12 billion while its capital adequacy level showed that it is cash rich as it stood at┬á 17.4 percentÔÇöand above the central bank requirement of 15 percent.

The┬ámost┬átraded and the biggest┬ácompany on Botswana Stock Exchange (BSE) has declared┬áa dividend of five thebe per share,┬áwhich will be paid on October 18, 2010. The company’s share price slipped 25 thebe to 210 thebe at the close of business on Friday.


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