BancABC in branch expansion drive

THATO KALA
Correspondent | Thursday January 26, 2012 00:00

 

In an interview with Mmegi this week, the Managing Director of BancABC Botswana, Jitto Kurian, said the move was part of efforts to build on the bank's establishment in the retail banking arena.  The bank previously operated as a merchant bank before switching to retail banking in 2010. Kurian told Mmegi Business: 'Our progress in the retail banking arena has been exciting. We have opened four branches over the last 12 months, three in Gaborone and one in Francistown.'

BancABC commenced retail banking two years ago after a decade of focussing solely on merchant banking. In addition to Botswana where it has its primary listing, the bank has operations in Zimbabwe, Zambia, Tanzania and Mozambique.

'In 2012, we are looking at expanding and building on that,' Kurian said. 'We are looking at opening five branches, most of them outside Gaborone.'Looking ahead, Kurian said their major worry was the effects of a situation where interest rates began to go up. The Bank of Botswana has kept benchmark interest rates relatively low over the past three years in order to boost economic activity after the 2009 recession.

This has led to most banks diversifying their product lines in an attempt to compensate for reduced growth in profits, particularly from interest income. 'Our concern, when we look ahead, is not the low interest rates,' said Kurian.

'Rather, we are worried about what will happen when rates do begin to go up and I think that is one area we are looking at cautiously. When interests go up, what is the impact going to be on an individual borrower and on the corporate borrower?'

In the last half of 2011, BancABC introduced new products geared towards the benefit of its customers. BancABC launched a home loan mortgage product that offers loans at zero deposit for new homebuyers.With most of the country's eight commercial banks already competing with the country's statutory banks for room in the mortgage loan arena, BancABC hopes its competitive edge will secure a niche in the market.

In December, the bank unveiled a bouquet of high-tech VISA-linked cards, notably a markedly innovative prepaid cash card through which users can access most banking services worldwide without bank accounts.

The new products also included two prepaid, five debit and five credit cards, a technology developed in partnership with VISA to stem fraudulent usage such as card skimming or cloning. Kurian said the response to the prepaid cards was exciting, especially at BancABC's Game City branch.

Meanwhile, in its unaudited interim results for the six months to 30 June 2011, 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, it 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.