BancABC 2010 Group Results Please In Watershed Year
BancABC, the Banking Group with operations in
Botswana,Mozambique, Tanzania, Zambia and Zimbabwe, today announced
strong full year audited results for the year ended December 31,2010.
Commenting on the results, Mr. Doug Munatsi, Group CEO for the BancABC
Group, said, "2010 was a year of major achievement for the BancABC Group
because our operating profit increased fourfold to BWP111 million up
from BWP26 million and for the first time in our history, all our
banking subsidiaries recorded strong profits. Even the Zambian operation
which stumbled in 2009 was successfully turned-around and posted solid
profits. The quality of earnings improved, with the majority of income
generated from core banking activities. This contrasted strongly to 2009
and prior years when non-recurrent income contributed significantly to
the profitability of the business."
Net interest income increased 67% to BWP298 million as both loans and
advances and net interest margin improved. All operations, with the
exception of BancABC Mozambique recorded an improvement in net interest
income. Non-interest income was flat, notwithstanding the fact that in
2009 interest-income was boosted by non-recurring income as a result of
significant gains realised on disposal of the equity portfolio in
Zimbabwe. Income from money market and foreign exchange trading together
with fees and commissions increased significantly during the year,
while non-recurrent income reduced significantly.
The Group has been successful in reigning-in loan impairments which
reduced by 69% to BWP16 million. This was largely on the back of
improved credit monitoring as well as the improved economic environment
across the foot print. Cost to income ratio was down by 5 percentage
points from 82% to 77%. However, operating expenses increased by 19% to
BWP435 million following dollarization in Zimbabwe as well as an
increase in retail expenses as the Group continues to expand this
The overall balance sheet size increased by 36% from 4.4 billion, with
deposits increasing 46% to BWP4.9 billion and loans and advances
increasing 54% during the year to BWP3.1 billion. Deposit growth was
across all the markets with accelerated growth in BancABC Botswana and
BancABC Zimbabwe. All banking subsidiaries registered growth in loans
and advances, with the exception of BancABC Tanzania, as management
focused on collections and rehabilitation of non-performing loans.
Group-wide the quality of the loan book continues to improve as
evidenced by the reduction in non-performing loans from 10% to 8%.
The Group has moved steadily towards its objective
of becoming a universal bank offering a full range of banking services
to clients. It continued expanding and strengthening its presence, and
has to date setup 17 retail branches across its foot print. In
Zimbabwethe retail business, which has been open for just over 12
months, is profitable. This compares favourably with internal targets
which had envisaged a branch becoming profitable 18 to 24 months after
"What is also gratifying is that we have funded the retail expansion
entirely from our own resources. All indications are that our market
share in our operating markets will increase on the back of our retail
expansion," Mr. Munatsi said.
Notwithstanding the share of loss from associates of BWP20 million, the
Group's attributable profit at BWP67 million was 15% ahead of the BWP58
million achieved during the prior financial year.
Turning to the operating environment, Mr. Munatsi said that BancABC had
benefitted from the widespread recovery experienced in Sub-Sahara Africa
as the economic woes of 2008 and 2009 receded. The countries in which
the Group operates benefitted from increased exports as commodity prices
recovered strongly during the year.
The Group's well-established wholesale banking business continues to
consistently generate higher numbers. The progressive investment in the
retail banking space should yield higher returns and positive
contributions within the next two to three years, strategically
positioning the BancABC Group to achieve its ambitions. The outlook is
bright, and to raise the Group's operations to the next level, the Board
and Management are actively seeking to raise additional capital. In
this regard, further announcements will be made in due course.
The Board also advised that after the end of the financial year,African
Development Corporation (ADC), a Mauritius-registered company had
acquired a 20% stake in the Company. The Group should benefit from ADC's
extensive European investor network.
The Directors declared a final dividend of 10 thebe per share.
BancABC's parent company is ABC Holdings Limited.
The company is registered in Botswana, has a primary listing on the
Botswana Stock Exchange and a secondary listing on the Zimbabwe Stock
Exchange. BancABC operates in Botswana, Mozambique, Tanzania, Zambia and
Zimbabwe and has a group services office located in Johannesburg, South
Historically, BancABC was a merchant bank offering a diverse range of
services. These included wealth management, corporate banking, treasury
services, leasing, asset management and stock broking. The Group is now
expanding into the retail space.
BancABC's vision is to become Africa's preferred banking partner by offering world-class financial solutions.