BancABC doubles profits on increased lending

BancABC doubles profits on increased lending
Published: 24 April 2019
BANCABC'S after tax profit increased more than two-fold to US$10,8 from US$5,2 million in the full year ended December 31, 2018, driven by growth in net interest income as the bank upped its lending.

In a statement accompanying the group's financial results, chairman Alvord Mabhena said the bank's loan book grew by 18% to US$217 million despite a challenging operating environment.

"This growth was achieved despite a "wait and see approach" that prevailed, associated with elections, as well as foreign currency shortages for importing clients," he said.

"Net interest income increased from US$26,1 million in the previous year to US$30,7 million in 2018 representing a growth of 18%," Mabhena said.

"The increase reflects a more productive balance sheet re-aligned to maximise on higher margins through efficient deployment of funding resources and the benefit of the improving loan book quality."

Non-interest revenue was up 57% to US$23 million due to fees and commission income and foreign exchange dealing income which went up by 31% and 24% respectively.

The bank's total assets increased by 2% to US$539 million due to growth in deposits which stood at US$392 million in 2018 from US$385 million in prior year as market liquidity continued to improve.

Operating expenses increased by 30% to US$40,1 million driven by higher employee-related expenses and investments in technology modernisation and customer-focused initiatives.

The cost to income ratio however stabilized at 76% due to improvement in revenue.

Capital increased from US$83 million to US$94 million driven by retained profits whilst the capital adequacy ratio was 39,1% in 2018 reducing slightly from 40,4% in 2017 due to growth in risk weighted assets.

"Our hope is that since the currency issue have been, and continue to be addressed, stability should return enabling businesses to move forward," Mabhena said.

"Our objective, going into the coming year, is to further strengthen our business together with our suite of product offerings and take advantage of impending business recovery to further boost our revenues and increase shareholder value."

The bank's shareholders include, Old Mutual, Botswana Insurance Fund and the International Finance Corporation.
- newsday
Tags: Bank,


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