Thursday, May 19, 2022

Retail banking boosts Banc ABC revenues

ABC Holdings, the pan-African banking outfit’s balance sheet strengthened by 46 percent to P 13.4 billion at the back of household lending, the company reported in its full year released this week.

Pre-tax profit surged by an astonishing 97 percent to P 212 million while attributable profits stood at P 133 million from P 83 million for the same period in the previous year. Further, deposits rose by 45 percent to P10.7 billion while advances increased by 50 percent to P 9.1 billion despite the challenging global economic crisis.

It stated that the performance was lifted up by all subsidiaries with the exception of BancABC Tanzania and, to a lesser extent, its Mozambican operation. The Group started to roll-out its retail banking operations from 2009 after they were awarded commercial banking license.

BancABC Botswana performed exceptionally well. Attributable profit, at P94 million, was 237 percent ahead of the 2011 performance of P 28 million. Net interest income improved by 218 percent to P252 million, are improved margins and a rise in the total loan portfolio.

Announcing the results on Tuesday, BancABC Group Chief Executive Officer, Douglas Munatsi, revealed that the significant investments made in retail banking in recent years were now generating substantial, sustainable returns. He described the 2012 results as representing a “landmark” and said they reflected “an excellent all-round performance”.

In 2012, the bank grew the number of branches to 61 from 49 and has now achieved critical mass in retail banking in Botswana, Zambia and Zimbabwe. He said certainly, some challenges remain in Tanzania and to a lesser extent Mozambique and added that the Group is confident of gaining traction in these markets also.

During the year, the bank successfully concluded a US$50 million rights offer. Proceeds have been deployed to strengthen the subsidiaries’ capital bases in line with anticipated growth in business volumes.

“Our corporate ethos and, most importantly, our people have shown that we have the skills and the willingness to tackle both adversity and exploit opportunity for the benefit of our investors and stakeholders,” said Munatsi.

Total income grew by 65 percent boosted by an improvement in net interest income of 63 percent and growth of non-interest income of 69 percent. Operating expenses outpaced the 2011 figures by 59 percent to P869 million owing to the Group’s expansion into retail and SME banking.

Munatsi noted a modest but encouraging decline in the overall cost-to-income ratio to 71 percent from 74 percent the prior year – though still on the expensive side. He said BancABC remained on track to achieve a target cost-to-income ratio of around 50 percent. He added that attainment of a cost-to-income ratio below 50 percent during 2012 by the Botswana subsidiary underscored management’s belief that a Group target of around 50 percent is achievable.

“In line with the Group dividend policy, a final dividend of 8 thebe is proposed. This will bring the full year dividend to 16 thebe. The final dividend will be paid on 3 May 2013 to shareholders on the register at the close of business on 12 April 2013,” said Munatsi.

During the year, the bank successfully concluded a US$50 million rights offer. Proceeds have been deployed to strengthen the subsidiaries’ capital bases in line with anticipated growth in business volumes.

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