Stanbic defies odds

SHARE   |   Monday, 04 April 2016   |   By Staff Writer
Stanbic Bank MD, Leina Gabaraane Stanbic Bank MD, Leina Gabaraane

Stanbic Bank Botswana defied the tough banking climate to produce sound financial results for the financial year ended 31 December 2015. A challenging macro-economic environment – including such aspects as the slowdown in the mining sector, business closures, and challenges in electricity and water supply – culminated in constraining growth in the loan book. “The prevailing low business confidence resulted in a decline in the loan book growth. This has naturally forced us to relook at our operational efficiencies and delivery of service to ensure that customers are sustainably delighted,” Stanbic Bank Botswana Chief Executive, Leina Gabaraane. “It is no longer about the loan size or number of customers but more about the return on assets and the quality of every transaction that the Bank enters into.” 

The Bank’s operating costs increased by 5%. This was primarily as the result of investment into technology and building critical staff competencies. Amidst all this, the Bank elected to focus on operational efficiencies and service excellence; this resulted in a healthy growth of increased transactional volumes and non-interest revenue. These results reflect the exceptional transactional capabilities the Bank has acquired since the implementation of the new core banking system in 2013. This system has allowed for the introduction of best-in-class digital value-added services to the market. The effective management of impairment was the highlight of the year, due to continued focus on rehabilitation, recoveries and revising risk appetite to align to current difficult market conditions. There were also some improvements in the quality of the loan book held and the quality of the securities held.

The Corporate and Investment Banking (CIB) division continues to provide a strong anchor for operations, generating growth in revenues whilst the Personal and Business Banking (PBB) unit emerged stronger than in the previous year. This drove the healthy growth of 18% in non-interest revenue. While the loan book remained flat year-on-year, there was an enhancement of the risk profile of the book which provides a positive outlook for both units. The Bank posted a profit after tax of P132 million. Total income increased to P700 million in 2015, and return on equity increased from 11% in 2014 to 14% in 2015. “Although the Bank profits have improved, management remains concerned about the prevailing environment which demands continued prudency,” said Gabaraane. “We remain committed to Botswana and Africa. We continue to move our staff, our customers, our communities and our Nation forward. We are resolute in this focus, and are pleased with the progress made thus far. We are committed to making progress, real and tangible, as we continue to fortify our customer confidence and improve their banking experience through relevant, innovative banking solutions,” said Gabaraane.