Friday, February 23, 2024

Stanbic reports somewhat healthy operational environment

One of the local commercial banks, Stanbic Bank Botswana, says a positive growth recorded by the domestic economy in the last quarter of 2016 has resulted in a slightly improved operational environment. 

The bank states in its annual report that despite the fact  that the operating environment remains very challenging in respect of a muted GDP growth, encountered in the mining and agriculture sectors, it managed to record profit after tax (PAT) of P195 million, representing an annual growth of 48 percent. 

The bank’s Interest income, however, went down by 9 percent at P632 million from P693 million of 2015, while Interest expense also went down by 40 percent at P235 million, further with Non-interest revenue up by 9 percent at P433 million. 

Still during 2016, Stanbic Bank Botswana’s impairment charges went up by 41 percent at P73 million from P52 million of 2015 whereas operating costs grew by 6 percent at P487 million from P459 million. The bank’s loans to customers increased by 11 percent at P6.5 billion while deposits went down by 3 percent to end the year at P9.2 billion from P9.5 billion in 2015. 

“The financial performance for the year is a reflection of the focused execution of the new strategy, the quality of our people and the improving agility/ resilience of our processes. These mitigated the impact of the tough operating environment,” the bank’s Chief Executive Officer, Leina Gabaraane said.

Meanwhile, the bank’s Personal and Business Banking (PBB) unit is said to be showing strong signs of recovery against a back-drop of higher sensitivity to monetary policy induced rate cuts experienced over the years. 

Chief Financial Officer of Stanbic Bank, Sam Minta, said: “This was mainly driven by improved market liquidity and effective cash flow management which resulted in 40 percent reduction in cost of funds.”  

Additionally the Stanbic Bank report states that game-changing interventions including revamped client value propositions and improved digital/client-facing channels have also had a positive impact on fees which increased by 10 percent. PBB is well positioned to continue with the improving trend and is expected to still add full profitability in 2017. 

Commenting on the overall performance of the domestic economy, Gabaraane said that the deterioration may be avoided by a combination of interventions including removal of bureaucracy which is stifling decision making and the implementation of projects.


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