Banks rake in healthy profits

Brian Benza
Staff Writer | Tuesday September 11, 2007 00:00

 

After FNBB and Barclays unveiled impressive financials in the past two weeks, Standard Chartered has capped it by announcing a P132 million after-tax profit in the period under review.

Standard Chartered's total assets increased by 24.7 percent to P8 billion while turnover surged 11.35 percent to P294 million. Net interest for the bank was up 22.6 percent while non-interest income fell 9 percent to P85.5 million.

Stanchart attributed the fall in non-interest income to lower transaction volumes, lower foreign exchange sales and option income.

The cost-to-income ratio increased to 41.4 percent from 38 percent the previous year; this was attributed to process improvements across all the business lines.
In the period under review, Barclays reported a 27 percent increase in net interest income to P268.8 million, largely driven by outstanding performance by its treasury division.

Although the two banks have different client bases and market share, their performances were largely at par, although Barclays declared a dividend of only 9 thebe compared to Stanchart's 20 thebe.

However, Barclays shareholders will not be worried about the seemingly paltry dividend as the bank has invested huge amounts of capital into its expansion programme in which they have opened 11 new branches, built 18 new ATMs and doubled staff.
As a reflection of the continued growth being enjoyed by banks, FNBB's year-end results registered a 15 percent asset growth to P8.4 billion, the bank announced two weeks ago.
FNBB is also very optimistic about its future, as they have also embarked on an expansion programme with the mining industry its prime target.

After the liberalisation of the sector, new banks are also beginning to penetrate the market with new entrants such as Bank Gaborone advertising jobs in the press, possibly as part of an expansion programme.

Despite the record perfomamces by the banks, all the three commercial banks were bearish on the Botswana Stock Exchange exchange as the DCI lost 1 percent.
Stanchart led the losers' pack in the week shedding 2.65  percent while FNB lost 1.49 percent and Barclays fell 1.06 percent.

A good set of financials are usually a positive fundamental for listed stocks.
However,  concern has been raised about service delivery by the commercial banks in this period when they are raking in above normal profits.

According to the Banking Adjudicator's annual report, in the period April 2006 to April 2007, there was a 60 percent increase over the previous reporting period in the number of complaints against banks by customers.

Barclays took the lion's share of the cases. But at a media briefing last week in Gaborone, Barclays managing director Thuli Johnson said apart from investing a fortune in the expansion of the bank, they had also committed a lot of resources in the improvement of their service delivery.

'We have invested a lot towards developing our staff in service delivery,' Johnson said. 'This will be done through training courses and investment in technology as we are aware that the customer must always be fully satisfied if the business is to continue growing.'