Saturday, October 24, 2020

Stanchart commits to aiding growth of economy

Standard Chartered Bank Botswana is hopeful that a number of government projects underway will promote economic growth and it also anticipates that this will help boost economic activity and improve 2016 growth prospects. 

Information obtained from the bank’s 2015 annual report outlines the bank’s commitment to position itself so as to play a key role in the recovery of the economy, by supporting its clients and participating in strategic projects that promote GDP growth.

“In 2016, we will continue investing in our digital capabilities to bring great convenience to our customers, as we look to celebrate 120 years of operating in Botswana in 2017,” reads the statement of the Chief Executive Officer (CEO) Moatlhodi Lekaukau.

He is of the view that the industry challenges that commenced in 2014 persisted into 2015, making it difficult to meet the performance targets. He added that they expect 2016 to be a better year albeit still subdued. He added that GDP forecasts indicate improvement over 2015, although continued slow growth of the global economy, which directly impacts the mining industry, could affect the domestic outlook. 

“Strength and internal capacity has prepared the bank to navigate the challenging external environment and position the business for growth in 2016,” Lekaukau stated.

The bank’s CEO stated in the report that the challenging trading environment characterised by a sharp decline in market liquidity, persistent low interest rates, and a depressed macro-economic environment, resulted in a substantial increase in the cost of funding, which impacted margins significantly, and led to high impairment provisions, ultimately, reducing income and profit. 

Lekaukau further said that in addressing these challenges, management deliberately focused on implementing sustainable solutions to the problem at the expense of short term performance. He added that in particular, the bank strengthened its balance sheet. He is of the view that while the actions impacted performance in 2015 they were necessary to secure the foundations and position the bank for sustainable growth into the future.

Meanwhile Bank of Botswana (BoB) uplifted the 2 years moratorium fees on banks beginning of January 2016 and the bank said it is much more stringent in terms of assessment and the extent to which it allows escalations. BoB is also guarding that banks do not attempt to play catch up on the moratorium by overly hiking their tariffs.

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