Property lending pulls FNBB through tough year

MBONGENI MGUNI
Staff Writer | Wednesday August 29, 2012 00:00

 

According to its results for the full year ended June 30, 2012, FNBB property loan book rose to P3.2 billion, while retail loans were up 13 percent to P2.5 billion, corporate loans another 38 percent to P1.1 billion and Wesbank vehicle loans up 7.1 percent to P1.5 billion.

Overall, the Botswana Stock Exchange (BSE) heavyweight grew its loan book by 17 percent to P8.4 billion, maintaining its position as the country's largest commercial bank by balance sheet.

While FNBB's loan book remained ahead of its local peers, its interest income grew by only two percent to P1.1 billion, reflecting tighter margins and a rise in impairments, factors which management grouped under 'difficult economic conditions'. 'We had a somewhat sluggish business environment which was not surprising looking at the GDP figures announced for March (2012),' FNBB CEO, Lorato Boakgomo-Ntakhwana told an analyst and media briefing last Friday.

'Businesses are reporting that what they are seeing is even worse than the GDP figures. Households were also under pressure not just from job losses but also from inflation expectations in the market.' In the 12 months comprising FNBB's financial year, the local economy battled to shrug off the effects of the global recession, amidst lower government support as the fiscus shifted towards a balanced budget after years of wide deficits.

Besides its loan book, non-interest income also boosted FNBB's year end figures, growing by 24 percent to P626.7 million and reflecting the gradual success of the bank's decision to shift growth away from a reliance on interest income.

The bank's chief financial officer, Steve Bogatsu, explained that the non-interest income growth was attributable to, among others, stronger trading income, the higher uptake of FNBB's e-solutions and a P25 million profit from the sale of the bank's shares in Visa Inc.

'The market has received most of our electronic products very well,' he said. 'Also, the uptime in our ATMs has increased very much, leading to more usage of our machines. We also expanded our ATM network in the market.'

FNBB's Bricks to Clicks strategy has seen it become a trendsetter in hi-tech banking solutions, such as the increasingly popular e-Wallet which has also been credited with reducing national numbers of the unbanked.