Aupa Monyatsi, the chief executive of Letshego Holding Limited shrugged-off concerns over his company’s bruised full year profit before tax that slouched by 30 percent to P801 355,00, like-on-like.
The lender’s subsidiaries in the eastern and western Africa dragged the results down as religious and economic troubles flared up in those regions.
The seasoned banker, Monyatsi is leading the march into Africa for one of the biggest companies trading its securities at the Botswana Stock Exchange (BSE).
Monyatsi joined Letshego mid last year and is presiding on the company.
“I am not at all worried by the results. Our fundamentals are very solid,” the seasoned banker said on Thursday following the presentation of the group’s financials in the capital Gaborone.
A breakdown of the group’s financials shows that Kenya and Tanzania debtors insisted on their religious believers and branded Letshego operatives as “Haram” – the opposite of Halaal because they are charging interest. Ghana is also involved in some delinquencies after their inflation rate hit 54 percent and its credit rating ruled as junk by crediting agencies. The country is also struggling to pay its civil service.
In Southern Africa, the eSwatini subsidiary was up 20 percent while Namibia was also up at the same margin. The key market, Botswana, outperformed the rest as usual. Meanwhile the company happily thanked its investor by a total of P 380 million in dividends while its share price was firm at 125 thebe by close of business on Thursday.
The world was thrown in high inflationary environment in early 2022 as Russia attacked Ukraine, resulting in many countries increasing interest rates to bring prices under control. The higher interest rates have increased borrowing costs, and companies like Letshego that rely on funding from other institutions had to pay more interest to borrow.
Wholesale bank funding makes 45 percent of Letshego’s total funding, while development finance institutions (DFIs) funding constitutes 23 percent, and bonds contribute 18 percent.
Moreover, the high inflationary environment has eroded consumer purchasing power, and has led to some customers defaulting on their loans, causing impairments to increase.
