Standard Chartered Bank Botswana (SCBB) has overturned its loss-making position recording a profit before tax of P28 million for the half year period that ended June 2018. In 2017, during the same period, the bank recorded a loan impairment induced loss of P66 million.
Fast forward to the first half of 2018, the bank’s impairment charges are now significantly down, reflecting positively on portfolio rebalancing that was implemented at the onset of the year.
SCBB Managing Director Mpho Masupe told journalists in the capital Gaborone this week that as part of its definitive portfolio management strategy, the bank implemented and completed a number of portfolio re-balancing initiatives.
“The last three years our performance has not been good and in 2015 we had high impairment from diamond and jewellery space and again in 2016 it got worse through BCL which affected our books,” said Masupe.
Comparing the six months ended 30 June 2018 together with comparative figures for 2017, Masupe further stated that in 2017 the bad performance from the diamond and jewellery sector was from the individual clients. He added that they decisively took appropriate steps in response to challenges they faced during last year. Masupe is of the view that liquidity and capital positions remain strong, supporting targeted growth in the second half and beyond.
“Our Retail Banking segment recorded a 5 percent increase on assets. Non-funded income remains a key growth focus, driven by a diversified product offerings and digital platforms,” said Masupe.
SCBB Chief Financial Officer Dr Mbako Mbo said costs have remained under control for the period at 8 percent year on year on the back of technology driven efficiencies and bank wide cost controls. He stated that Net interest income is down by -17 percent from P270 million in June 2017 to P223 June P223 million while Non funded income is -15 percent from P161 million in 2017 to P137 million in June 2018.
Mbo further stated that in line with market wide liquidity trends, customer deposits declined by 5 percent with a marginal 3 percent decline in overall client assets. He added that driving the decline in overall client assets is a decision to reduce exposure in certain subsectors on the corporate book. He said however, the retail segment assets grew 5 percent year on year.
“The bank’s balance sheet and the capital position remain strong and our costs are under control. Despite no change in the Bank rate, we noted an upward movement in the average commercial Bank deposits between December 2017 and June 2018,” said Mbo.
He spoke of the local banking environment which he said it remained under notable strain during the period under review, with overall deposits held by commercial banks experiencing a marginal 1.8 percent growth since 31 December 2017.