First National Bank of Botswana (FNBB) last week announced a solid performance and positive results for the half-year ended 31 December 2011.
The bank’s Chief Financial Officer Steven Bogatsu said in spite of the challenges in the economy, the group’s profit before tax increased by 13 per cent from the corresponding period.
He also said despite an increase in reserving requirement from 6.5 per cent to 10 per cent in July 2011, net interest income before impairment of advantages grew by 12 per cent due to an increase in advances of 24 per cent.
“The growth in advances was due to the impact of the recent public sector strike and a more retail focused strategy. Further, our statement of financial position grew by 17 per cent from the previous year with advances to customers growing by 24 per cent mainly in the property finance and retail space.
Impairment levels grew by 54 per cent off a very low base and management’s focus on the quality of the asset has resulted in impairments to gross advances ratio of 1.2 per cent which is significantly below the industry norm but credit management and collections remain a focus area.
The group however continues to manage its capital in line with the board’s approved capital management framework and Basel II which is to be adopted in Botswana this year.”
In a review of the economic climate under which the results are released, FNBB Chief Executive Officer, Lorato Boakgomo-Ntakhwana noted that the Botswana economy continued to show some recovery from the earlier economic slowdown.
“Both the mining and non-mining private sector recorded growth during the period under review. This recovery is however expected to be impacted by a weakening US economy and the Euro zone crisis. This turbulent economic climate for the world economy has led to increased uncertainty and risk aversion, which in the long run will have a trickle down effect on the local economy by impacting on mineral exports and momentum of growth”.
The FNB boss said the review aimed at sharpening employee value proposition to achieve “employee of choice status”. She said customers should be provided with service excellence thus staff should have multi-task and leadership skills. She further said there should be increased product penetration and also focuses on ATM availability which has been increased from 92 per cent to 97.2 per cent.