• Net fees and commission income grew by 7% Y-O-Y to P160m
  • Cost to income ratio remained at 52% Y-O-Y
  • Return on equity of 22%
  • Return on risk weighted assets of 3.8%
  • Balance sheet growth of 4%
  • Declared an interim dividend of BWP100million subject to regulatory approval

Barclays Bank of Botswana Limited today announced its results for the six months ended 30 June 2017.

Overall, the business achieved a Profit Before Tax of P249m for the six months ended 30 June 2017. Revenue remained flat in the first half of the year across segments, with the exception of Business Banking that registered a 5% growth in income year-on-year.

Net interest income remained relatively flat year-on-year driven partly as a result of the interest rate cut applied in August 2016, as well as competitive pricing to attract both deposits and assets.

Net fee and commission income increased by 7% year on year. This growth was driven mostly by our Retail and Business Banking (RBB) segment where we had an increase in transactional and activity fees from our various digital channels such as Point of Sale (POS) machines that have continued to drive issuing and acquiring income upwards.

Operating costs were well contained and came in flat in comparison to the same period last year. Our cost efficiencies resulted in an overall cost to income ratio of 52% for the reporting period, which is below the banking industry market average of 60% as prevailed in the first few months of the year. Prudence in incurring operating expenditure continues to be at the heart of our strategic agenda as we look to grow our business.

Impairments increased by 1% in comparison to the prior period ended 30 June 2016. This stable performance is attributable to our enhanced collection capability and conservative credit extension. Our Loan Loss rate averaged 1.84% over the period in comparison to the banking industry market average of 7.5%.

It is however gratifying to note that in comparison, the second half of 2016, profits have grown by P25million or 11%. We anticipate posting a stronger second half of the year 2017 as momentum in our key business segments starts to pick up in earnest. Balance sheet registered a 4% growth in comparison to the previous review period ended 30 June 2016 as we continue to execute on our strategy. Our focus in the short and medium term is to optimise our balance sheet, whilst focusing on revenue generating opportunities.

The bank delivered results that underscore our resilience as a business. These results were realised in the midst of various external challenges such as the slowing economic growth to 0.8% in the first quarter of 2017, declining credit growth across the sector, low interest rates and a general slowdown in the recovery of commodity prices. These do not deter us from our ambitions to be the bank of choice in Botswana. The bank continues to make progress in supporting key segments in various sectors of the economy.

Reinette van der Merwe, Managing Director of Barclays Bank said: ‘We are excited by the transformative journey that we are undertaking. As we embrace our destiny as part of a pan African group, we also take cognisance of the opportunities that it presents for us and our stakeholders.’

The balance sheet growth was influenced by a year-on-year growth of 9% in customer deposits. The growth realised is above the banking industry market average of1% as at 30 June 2017. The growth in deposits was mainly driven by growth in short term funding. Managing funding risk continues to remain at the core of our business and the strategy is focussed on optimising cost of funding by ensuring a reasonable mix between short term and long term funding.

Barclays Bank of Botswana declared an interim dividend of 11.735t per share, subject to regulatory approval for the half year ending 30 June 2017 against a backdrop of strong capital levels and internal capital generation capacity. Looking forward, in light of continued modest growth in household incomes as well as restrained economic expansion, we remain mindful of the challenges, which call for continued caution while exploring opportunities within our chosen segments.
Reinette concludes: “We are confident that our solid client partnerships and strong innovations will continue to drive positive momentum, as we execute our strategy. We are excited about the future of Barclays Bank of Botswana and given the evolution of our business we remain optimistic of the prospects that lie ahead.”