Thursday, August 5, 2021

SCBB performance tumbles due to lack of innovation

Standard Chartered Bank of Botswana (SCBB), the oldest commercial bank in the country, slipped for the second straight year as its balance-sheet showed lack of innovation.

The move is in contrast to the general mood within the financial services sector that has generally withstood the challenges of the worst recession since World War II.

In the full year results to December 31, 2010 the company revenue slouched down to P811 million from P 923 million in the previous year while total profit edged down to P224 million  from P 235 million in 2009.
SCBB remained a bad performer compared to its peers. BancABC and First National Bank have already presented  outstanding  full year and half year results  respectively, while Barclays Bank of Botswana is expected to post sterling full year results in double digits.

SCBB loans to customers, the guiding principle on the performance of commercial banks, remained flat at P 3.4 billion as it adopted a very conservative attitude towards its customers.  Most of its cash, P 5.1 billion  from P 3 billion in the previous,  was pushed into Bank of Botswana Certificates ( Bobcs) rather than its core business of lending to customers.

It also shunned lending to other commercial banks and preferred a risk free and high yielding Bobcs. The strategy of pushing all the money into Bobcs will present future high risks as other commercial banks will eat on its markets share.

Already BancABC and┬áFNBB have indicated their intention to increase their┬ámarkets share and Stanbic Bank of Botswana┬áis┬ágrabbing some┬ábig corporate dealsÔÇöespecially in the mining sector.

The bank blamed the global economic recession for its performance and further warned that the country has not fully emerged from the downturn.

“While the global economy is in a better shape┬áthan it was┬álast year, we are still far from complete recovery. Botswana┬áeconomy is also continuing to gain momentum,” the SCBB, which is still struggling to get a substantive Managing Director, said.┬á

“Improvements in mining┬áexports are encouraging; however, it is important that as we pull out of recession, we all play role ensuring that we emerge a stronger economy with a more efficient banking system.”

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