The African Banking Corporation (BancABC) profit for the half year to June more than doubled to P129 million compared with the same period last year, driven by a strong growth in net interest income from its retail banking unit in Botswana, Zambia and Zimbabwe.
The Botswana Stock Exchange-listed financial services group said on Tuesday its net interest income increased by 47 percent to P476 million during the period under review.
BancABC Group Chief Executive Officer, Douglas Munatsi, said the retail banking segment was the major driver for the growth experienced during the period under review.
“We have posted a pleasing set of results as diversification of our business into retail banking is beginning to bear fruit,” said Munatsi.
Presenting the group’s financial review, Beki Moyo the Group Financial officer said the business has now achieved significant growth in BancABC Botswana, BancABC Zambia and BancABC Zimbabwe, as such the three subsidiaries posted solid sets of results.
With BancABC Botswana being the best performer in the group for the period under review, recording an attributable profit of P81 million (47 percent), ABC Holdings attributable profits to shareholders grew by 127 percent to P143 million for the year ended June 2013 from P56 million in 2012. The group pre-tax profit increased by 77 percent to P169 million for the year ended June 30, 2013 as compared to P96 million in prior year.
Moyo said the balance sheet growth was subdued largely due to a deliberate policy to slow down on lending and manage the group’s liquidity position more conservatively.
The group’s net impairments were 351 percent up to P146 million. “P129 million of this charge was in respect of three clients, with one in each of Zimbabwe, Tanzania and Mozambique. The balance of P17 million was largely from portfolio impairments driven by the growth in the loan,” said Moyo.
Moyo said operating expenditure increased by 40 percent to P 529 million for the year ended June 30, 2013 as compared to P379 million recorded in 2012 due to expansion in retail banking footprint. He said non-interest income was up by 58 percent to P371 million underpinned by an increase in transaction volumes across all subsidiaries.
BancABC Zambia had the largest growth on the back of an increase in customer number in consumer lending as well as increased bond trading income. Profitability grew by 94 percent from P17 million in the prior year to P33million in the current period.
However Moyo said BancABC Mozambique is profitable but not at the rate they expected. “Current period performance was hampered by costs of expansion into the retail space which will only start contributing to revenue in the coming period,” he said.
“BancABC Tanzania continues to be a challenge for the group. However, substantial progress has been made in cleaning up the balance sheet and the business has recently been recapitalised,” said Moyo.
BancABC Zimbabwe attributable profits of P48million was 3 percent lower than P50million achieved in the prior year. “This was due to the P55million impairment in respect of one customer and the unfavourable macroeconomic environment,” said Moyo.
Looking ahead, the Group CEO, Munatsi said it is the group’s desire to sustain the growth rate in the second half. Liquidity management and credit management will be the major areas of focus for the rest of the year.
