Sello Motseta
15th September 2022
Absa Bank Botswana today reported a 36% increase in profit before tax which amounted to P395 million, with the principle drivers behind the improved profitability being an 8% increase in net interest income, together with a 72% reduction in credit losses.
The bank’s strategic intent to drive fee income together with digital income, while continuing to embark on its cost containment strategies, yielded fruit with most of its income lines, including interest income ending the half year on a high note while expenses remained contained. The results of the containment being visibly noticed on the interest expense and operating expenses.
“Amidst a challenging operating and dynamic economic environment in H1 2022, we remain optimistic that as economies are opening with lessened restrictions, we can expect to close the year on a positive note. Our performance thus far validates that with the measures that we have put in place for our colleagues and clients, we see ourselves emerge victorious against the unpredictable macro-economic conditions” said Keabetswe Pheko-Moshagane, ABSA Managing Director.
The Bank maintained strong liquidity position during first half of the year despite prevailing market challenges. ABSA has recently launched a retail offering involving the Multi-residential Home Loan
and increased the number of Agribusiness customers.
Retail Banking remained resilient in its continued journey to be the primary partner for clients. With the intent to be an active force for good focusing on partnering with clients as they diversify revenue streams and offer a seamless digital experience. The business displayed revenue growth of 9% with net interest income and non- interest income registering a 9% and 7% growth respectively. Loans and advances to customers, and customer deposits both grew by 5%.
“Our performance echoes our customers and shareholders confidence in our Absa brand. We would not have achieved such pleasing results without the unwavering support and resilience of our customers as well as the dedication and commitment of our employees,” said Cynthia Morapedi, ABSA Financial Director.
The improved performance was noted bank wide with all business units reporting strong growth from a low base in the prior year, while still maintaining strong capital position at 20%, and capacity to pay off dividend which resulted in performance efficiency and improving overall return on equity.
The bank’s journey of growth remains anchored on putting its customer needs at the centre of everything that they do. Continued increase of its brand visibility and interactions with customers through multiple customer centric interventions led to a 4% year on year growth in customer numbers which is a true reflection of African identity – helping customers get things done.
The availability of self- service and alternative banking channels has led to a 9% year on year growth in the number of customers utilising digital platforms. The Bank continues to enhance technology and innovation to create a seamless customer experience.
Absa Bank Botswana remains confident that the local economy is recovering towards its pre COVID-19 level and expects the trend to continue in the second half of the year.
Despite the unpredictable operating environment, its solid balance sheet, evidenced by capital ratios that are well above the regulatory requirements, positions the bank to absorb any future shocks and grow the business sustainably.
The Bank remains steadfast in executing its refreshed strategy and being an active force for good.
It also continues to enhance its digital platforms and develop new solutions that offer customers convenience as well as forge rewarding partnerships that provide value to customers during this increasingly challenging economic climate.
“We continue to manage major risks including emerging risks that impacts business,” said Morapedi.
Morapedi maintained that net interest income will gradually improve, non-interest income growth is expected to maintain its momentum and the ABSA credit loss ratio will slightly increase due to resultant pressure in disposable income.
