BancABC has recorded P68.9 million profit before tax, which is a slight increase from the P68.5 million that was recorded in the prior year, despite the difficult economic environment caused by the COVID-19 pandemic.
he bank said the negative variance on loan impairments is a result of marginal increases in non-performance in the retail portfolio due to the financial strain of COVID-19 and Expected Credit Loss (ECL) model enhancements adopted in the latter part of 2020. Commenting on the results, the bank’s managing director Kgotso Bannabotlhe said the bank continues to operate under these difficult times and remain optimistic that as the economy opens, credit appetite will increase. “In 2020, the bank had initiatives to contain costs given the prevailing economic environment.
The bank continues to exercise caution when it comes to spending with key investment spend for improvement of the customer value proposition that should deliver value through the economic cycle being prioritised,” he said. Bannabotlhe said the retail segment saw an increase in customer deposits this year, signalling an improvement from the previous period and strengthening the current funding mix while the commercial segment was successful in reducing the cost of funding. “Whilst the increase is marginal, significant effort is being expended in ensuring rollback of deterioration in some pockets of retail credit portfolio.
There were no new COVID-19 related restructured loans extended to customers this year across all the segments,” he said. He added the bank’s long-term borrowings are reducing year-on-year as they continue to repay the offshore liabilities as they restructure the balance sheet to become more dependent on local currency funding. On April 19, 2021, ABC Holdings entered into definitive agreements with Access Bank Plc for the sale of its 78.15% shareholding in African Banking Corporation Botswana.
The transaction, which has already been approved by the Bank of Botswana, is now near completion. The group expects the change of ownership and control to be completed by end of the third quarter. “Access Bank brings strong financial backing for BancABC Botswana and is expected to significantly fast track the strategic execution for the bank. Indeed, we are currently running a transition and integration management project, which is geared towards ensuring we can capture the value from the merged entity as soon as possible.
We expect that as the economy continues to open up, growth opportunities will also become available. The next six months to the end of the year we will continue to focus on both our strategy and the merger into Access Bank Group,” he said.