First National Bank Botswana (FNBB) has, against the background of a rebound in the global environment during 2013, reaffirmed its ability to stay strong.
This was made evident in the release of the Bank’s unaudited summarised financial results and dividend announcement for the half year ended 31 December 2013.
The results were largely driven by the substantial growth in new business for the period under review.
“To be able to appreciate our financial results in the context of the global and local economic climate, it is important to understand the challenging times our businesses have been operating in.
We have seen no less than five years of significant macroeconomic volatility on a global scale, with this having stabilised in 2013.
Despite prospects for developed economies in particular having improved, macroeconomic risks have not disappeared,” said FNB Botswana CEO, Lorato Boagomo-Ntakhwana.
Despite tight liquidity conditions and credit growth being on a downward path, the Bank achieved a 6% growth on total balance sheet.
Tight liquidity conditions in the market led to total market deposits held by commercial banks increasing modestly by 2.8%.
In spite of this, the Bank achieved a 7% growth in deposits by customers from customers, achieving a growth faster than the market.
“We have witnessed the lowest interest rate environment seen in 20 years with the bank rate cut by 200 basis points.
This reprieve in interest rates has led to an expansion in credit growth driven by the Consumer segment. Loans are also more affordable to the consumer. Annual credit growth in this segment remained high at 26.7% as compared to total credit growth of 18.2%”
The Group’s capital adequacy ratio, which includes the dividend reserve, has been maintained at 19.6% as at 31 December 2013.
This goes above the Bank’s internal limit as well as the required ratio by the Bank of Botswana of 15%.
Although operating expenses were 13% higher than those recorded in the same period in 2012, this was primarily due to the Group’s increased investment in the introduction of new electronic channels and the launch of a variety of new products during the period under review.
An investment in infrastructure and people proved necessary to allow for the launch of the prepaid electricity platform as well as the rolling out of Rand dispensing ATMs and slim line mini ATMs during the period.
The Bank’s cost to income ratio of 39.9% remains at an acceptable level and is well below the norm.
FNB Botswana has noted a firm dedication towards bringing increased convenience to customers.
Looking into the future, the Bank is expected to continue in realising its overall strategy to move customers away from the more expensive traditional banking structures to cheaper banking channels; this, in an effort to build upon robust results and achievements for the first half of the year and taking into consideration the tough trading environment.