BancABC plans 30 outlets by year-end

BRIAN BENZA.
Staff Writer | Friday August 19, 2011 00:00

The BSE-listed bank, which has operations in five countries across southern Africa, said this when it announced its unaudited interim results for the six months to June 30 2011 in Gaborone this week.

BancABC commenced retail banking last year after about a decade of focussing solely on merchant banking. It has already opened three branches in Botswana as its retail banking rollout progresses satisfactorily, with a high uptake of its products across the network. In addition to Botswana where it has a primary listing, the bank has operations in Zimbabwe, Zambia, Tanzania and Mozambique. Said Group CEO Doug Munatsi:

'The balance sheet at P7.4 billion (US$1.1 billion) surpassed the US$1-billion mark for the first time in the history of the company. All major lines of business recorded significant growth during the period under review.

'We are particularly pleased with the progress made in the retail banking space where the group now operates 21 branches, compared to 13 this time last year. While the rollout of information technology systems has not been smooth, we are confident that all the key systems will be fully operational by the end of the year, which positions our business well for the future.'

Total income for the group sat at P311 million, with attributable profit to shareholders at P37 million, from P28 million in the comparative period last year. BancABC said its subsidiaries recorded attributable profits of P73 million, compared to P45 million registered in the comparative period last year. Major contributors to this increase were BancABC Zimbabwe and BancABC Tanzania, which recorded increases of 421 percent and 69 percent respectively.

BancABC Botswana's attributable profit was flat, but at 15 percent still remains the second largest contributor to the stable after the Zimbabwe subsidiary. BancABC Mozambique and BancABC Zambia recorded declines of 41 percent and 18 percent respectively. 

In the period, Head Office entities registered an attributable loss of P31 million and share of associate's results was a loss of P5 million. The headquarters is based in Botswana where the group has a primary listing. BancABC has a secondary listing on the Zimbabwe Stock Exchange.

'Even though overall Head Office expenses declined by 9 percent to P43 million, total income declined sharply by 50 percent to P16 million,' the bank said. 'The massive decline in income is due to the fact that most of the cash that was held and invested by Head Office has now been deployed as capital into the subsidiaries.

'The cash pool should increase going forward as subsidiaries start to declare dividends. Head Office, which is in Botswana, also had a tax charge in the current year of P3.5 million, compared to a tax credit of P8.6 million in prior year.' The statement also said BancABC Botswana performed relatively well, with revenues increasing by 27 percent from an increased asset base and volume of transactions. Loans and advances increased by 27 percent with a concomitant increase in net interest revenue of 29 percent.

The overall performance was negated by the increase in operating expenses of 47 percent due to increased activity following the rollout of retail banking.

'The subsidiary has opened three new retail banking branches since 30 June 2010 which are fully operational,' Munatsi said. 'Tax optimisation measures reduced the tax bill for the period, and this helped reduce the impact of the increase in operating expenses.

'The overall impact of the above was a marginal reduction in profit after tax of two percent when compared to the prior year.'