Standard Chartered Bank Botswana’s operating income for the year ended 31 December 2015 has gone down by 18 percent largely due to the bank’s decision to strengthen the balance sheet, CEO, Moatlhodi Lekaukau said on Thursday during the financial results announcement. Lekaukau said this was a deliberate decision to strengthen the balance sheet at the expense of short-term performance. He said all in all it was not a good year for the industry as a whole but is optimistic that 2016 will be a good year for them. He said though the headwinds will continue as a bank they are better placed to deal with those, insisting that they have the right strategy going forward. Stan Chart’s balance sheet grew by 3 percent year-on-year to P13 billion which Lekaukau said it is highly liquid with advances to deposits ratio at 73 percent which he said it is the largest in the sector.
Profit before Tax for the year is P338 million which is 83 percent lower than the previous year due to decline in revenues. The quality of the portfolio is reported to have remained strong despite the significant specific impairment of a single client on the corporate side, without which the ratio of impaired loans to total gross loans is believed would have been 1.02 percent. By segments, the retail banking sector was the sector with the highest income reaching 546, 7 million followed by Corporate and Institutional Banking and Commercial Banking, the latter which is relatively new and was formed in 2014. The bank has set its focus for the coming year and in the retail sector, Stan Chart looks to expand its footprint by opening two new branches; improving wealth management capabilities by launching general insurance, improved Life Insurance products for individuals and businesses and introducing local currency bonds as well as investing on digital platforms to enhance client experience and convenience.
On the Commercial Banking side, the bank said it wants to continue with the momentum on trade financing to propel clients into future large corporates and also launch both short and long term Bancassurance solutions for the commercial banking segment. The focus on the Corporate and Institutional Banking will be to increase the utilization of trade facilities; grow the share of Non Funded Income; expand client base and to be the preferred partner of state owned enterprises.
Stan Chart’s has a market capitalisation of P3.3 billion and by Thursday its shares were trading at 1100 Thebe per share.