Thursday, April 25, 2024

Market cheers Barclays’ strong results

Barclays Bank of Botswana, the largest commercial bank in the country, was in a debonair mood earlier in the week as its half year income rose to 36 percent buoyed by the retail customer division.

“2008 has been a good year and the results are very good,” Barclays’ finance director, Wilfred Mpai said Monday.

According to the financial results income was at P 538 million against P 396.7 million at the same time last year while profits for the year was up 41 percent to P 208.5 million from P 147.6 million.

Despite the high inflationary rate, environment loans and advances to households stood at P 3.5 billion against corporate loans which were sluggish at P 925 million for the six months period to June.

The bank has increased its sales agents to 1000 in a bid to increase its retail loan and deposit book among the previously unbanked communities. According to statistics, 55 percent of the people in the country are unbanked.

The bank said it was not concerned about the possibility of household default rate delinquencies as customers that it has advanced them loan were of impeccable record.

“Yes, we are entering an area where there is a risk. We feel that we have done enough in terms of internal assessment and we have built capacity in terms of collection,” Managing Director, Thuli Johnson, said.
Johnson said the growth in the book is largely due to branch network expansion which the bank embarked on in the past year. Last year alone, the bank opened 14 branches across the countryÔÇöincluding in the remotest corners of the country, such as Shakawe.

“We took risks by opening new branches and now they are beginning to bear fruit because we are now closer to people,” he added.

The problem with the retail sector is that it is volume driven and could be problematic during times of high interest ratesÔÇödue to high default rates.

However, he stated that competition has grown in the market which is prompting them to look at new ways of diversifying their income and coming up with an improved IT platform.
The new IT platform is expected to see the bank rolling out new products in the second half of the year and even beyond.

The treasury department saw its income reflecting less impact of the Bank of Botswana Certificates and being powered by products like hedging. All told, the sector reflected a gross income of P 278 million.

This week the market cheered Barclays’ results as it climbed up by ten thebe on Wednesday for the second consecutive day to reach 780 thebe on 5 600 shares but offers are at 900 thebe.


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