Standard Chartered Bank of Botswana (SCBB), the oldest commercial bank in the country, slipped for the second┬ástraight 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┬áthe challenges of the┬áworst recession since World War II.
In the┬áfull year results┬áto December 31, 2010 the┬ácompany revenue┬áslouched down to P811 million from P 923 million in the previous year while total profit edged down to P224 million┬á from P 235 million┬áin 2009.
SCBB remained a bad performer compared to its peers. BancABC and First National Bank have already presented┬á outstanding┬á full year and half year results┬á respectively, while Barclays Bank of Botswana is┬áexpected to post sterling full year results in double digits.
SCBB loans to customers, the┬águiding principle on the performance of┬ácommercial banks, remained flat at P 3.4 billion as it adopted a very conservative attitude┬átowards its customers.┬á Most of its cash, P 5.1 billion┬á from P 3 billion in the previous,┬á 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┬áa risk free┬áand high yielding Bobcs. The strategy of pushing┬áall the money into Bobcs will present future high risks as other┬ácommercial banks will eat on its┬ámarkets 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┬áthe┬ácountry 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.”