Monday, October 3, 2022

Letshego reports 10% drop in net income

Botswana Stock Exchange (BSE) quoted lender, Letshego Holdings recorded a ten percent fall in its net interest income for the first half of 2022, the group’s recently published interim financial results shows.

Letshego is an inclusive finance focused Group with microfinance banking and consumer lending subsidiaries across eleven countries in sub-Saharan Africa.

According to its half year period financials for this year, its net interest decreased to P917.5 million (H1 2021: P91.02 billion) while Profit before Tax (PBT) decreased by 18 percent after reaching P446.0 million (H1 2021: BWP544.1 million). The group says a higher effective tax rate of 44 percent (H1 2021: 42%) translated to a 21 percent decline in profit after tax to P247.9 million (H1 2021: P313.7 million). The company’s Basic earnings per share were 10.1 thebe (H1 2021: 13.4 thebe).

On the other side, the group’s operating income went by 82 percent to P208.5 million (H1 2021: P114.4 million). The group says its expected credit losses increased by six percent to P80.6 million (H1 2021: P75.7 million) while borrowings increased by 35 percent to reach P7.89 billion (H1 2021: BWP5.86 billion). Customer deposits also increased by 18 percent to P1.16 billion (H1 2021: P988.9 million) while Net advances to customers increased by 10 percent to P12.20 billion (H1 2021: P11.10 billion).

The fall in profitability comes at a time when the lender has had a change of guard at boardroom and executive suites. The company recently announced the appointment of Aupa Monyatsi as group chief executive. A new board of directors was also put in place following departure by some directors in the old board on the eve of the group’s AGM. The new board is led by Philip Odera who was elevated to the position a few days before the AGM after its former board chairperson – Enos Banda and two non-executive directors – Dr Gloria Somolekae and Hannington Karuhunga called it a day. Odera had served in the previous board since 2019. Other new board members include Rose Mwaura, Ketlhalefile Motshegwa, Christopher Mokgware, Professor Emmanuel Botlhale and Jayaraman Ramesh. Other nominees who did not make the cut include Wilfred Mpai, Maleho Mothibatsela, Oteng Sebonego, and Boitumelo Molefe. Meanwhile the group’s balance sheet grew by 26 percent to P16.87 billion (H1 2021: BWP13.34 billion) and has since declared an interim gross dividend of 5.8 thebe per share.

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