National Development Bank (NDB), one of the country’s underpinned financial institutions continues to make strides as it readies for commercialisation and privatisation.
The bank has increased its comprehensive income from P40.4 million in 2011 to P45.7 million in 2012-2013 for the period ended 31 March 2013 and the 50 year old bank attributed growth in its loan book to improved efficiencies as the bank rolls out its current strategy.
NDB Chief Executive Officer (CEO), Lorato Morapedi, says the bank reaffirmed its commitment towards the main pillars of the strategy in terms of achieving a high level target of growth of net loan book value.
The bank’s total assets grew up by 23 percent with total assets of P1.430 million compared to P1.162 million in corresponding period with the growth driven mainly by a 16 percent growth in net loans and advances.
“Internally we did the bank’s structure realignment, and we have introduced relationship managers who are also sector based. The bank is responding to customers’ needs,” Morapedi told Sunday Standard.
The bank was however hit by an impairment loss on financial assets that reduced by 20 percent from P48.5 million to P38.5 million as a result of the bank’s reinforced account monitoring and relationship management to improve quality of the loan book.
“Our major strategic initiatives include the implementation of a new integrated banking system geared towards improving efficiency in the delivery of services,” said Morapedi.
The CEO revealed that NDB’s focus during the year was on setting the basics for key major transactions such as privatization and commercialisation and expressed satisfactory on the structure re-alignment exercise which she said has been successfully completed and a new structure is now operational.
“The impending privatisation and commercialisation of the bank remains a clear objective to position the bank as a bigger player in the banking and financial sector,” she stated.
According to NDB’s results, net interest income increase by 13 percent to P158.5 million in from P137.5 million. Morapedi said the bank will pay 25 percent of its comprehensive income to government as a shareholder.
Morapedi was optimistic that the bank continues to adequately prepare for the major transition and strategic review exercise conducted during the year considered key priorities to seamlessly transition the bank into a commercialised entity.
She also revealed that the bank has about 24 months to submit the application to the Central Bank for commercialisation and added they are ready for the transition.
According to the financial results, the bank’s portfolio is largely composed of agriculture.
“Agriculture leads, followed by mortgage loans in terms of the loan book and are mainly due to the bank’s deliberate drive to promote provision of shelter to Batswana,” said Morapedi.
The business lending portfolio increased during the under review with the bank assessing 2.813 applications worth P644 million.
“The bank continues to be relevant and resilient and also I am comfortable and have confidence within the team I am working with. Public education is key as well as to improve profitability. The bank and the financial sector in Botswana is gradually recovering,” said Morapedi.