Stanchart bounces back to profitability
Pauline Dikuelo | Friday August 24, 2018 11:37
For the same period last year, Stanchart Botswana recorded a P66.5 million loss, owing to heavy impairments from a client in the diamond business.
The bank ended up with a P189.3 million loss for its full year ended December 31, 2017, one of the steepest losses by a local bank in many years. On Wednesday, when unveiling the improved results, SCBB CEO Mpho Masupe said the bank had managed to clean its books of the poor performance, with signs of improved positivity. “It was individual impairments that were affecting the bank. However, we are going to get back to the positive as we have controlled what has been troubling the bank for the past three years,” he said, in a briefing to media and analysts.
Masupe said for its latest results, the bank had leveraged on a strong balance sheet underpinned by a well re-balanced portfolio and adequate capital.
In 2015 and 2016, Stanchart Botswana’s performance was affected by the closures of Motiganz Botswana, a diamond polishing firm, and BCL Mine. Last year the bank sank to its losses due to over-exposure of its loan book to another diamond jewellery client. The local bank has since exited funding the diamond sector, in line with a decision made at group level. “The results that we are presenting are a validation that we are on the right track,” Masupe said. “We decisively took appropriate steps in response to challenges we faced during last year and we have always ensured prudence guides the way we do business.”
For the six months to June 2018, SCBB’s customer deposits declined by five percent to P11.1 billion, while loans to customers slowed by three percent to P7.5 billion. “Driving the decline in overall client assets is a decision to reduce exposure in certain sub-sectors on the corporate book. However, the retail segment assets grew five percent year-on-year,” the CEO said.