Reporter KABELO ADAMSON looks at the leading players on the Botswana Stock Exchange (BSE). In the top five there are three commercial banks.
FNBB – P9 billion
First National Bank of Botswana (FNBB) remains the most valuable entity on the Botswana Stock Exchange listed entities with a market capitalisation of P9 billion. The bank, which commands a market share of around 27 per cent despite new entrants, kept its position at the top under the leadership of the outgoing Chief Executive Officer, Lorato Boakgomo-Ntakhwana, with the largest balance sheet and advances and becoming the most profitable bank.
As of the latest financial results which were posted last week, FNBB’s balance sheet grew by 12 per cent to arrive at P17.6 billion which further imposed FNB as the number one bank. The bank has more than 400 000 clients. During the six month period, the bank advances to customers registered a strong growth of 17 per cent, thereby reaching a historical high of P12.9 billion supported by good growth in deposits from customers of 11 per cent. Most of the bank’s advances growth was achieved in the secured asset class as the bank moved to a more conservative credit appetite.
In her presentation during FNBB financial results in last week, Ntakhwana had noted that the emergence of new players into the market does not possess a direct threat to them as what they do is different from other commercial banks.
Letshego – P5.5 billion
Pan African micro-lender Letshego Holdings has a market capitalisation of P5.5 billion, the only listed micro lender on the BSE. Letshego has been experiencing an upward trend for the last few years supported by the group’s penetration into the African market.
Under the leadership of the previous Managing Director (MD), Jan Claassen, the group saw its proposal for the banking license rejected by the Bank of Botswana (BoB), however, the new MD, Christopher Low recently disclosed that they have no intentions of re-applying until the licensing categories have been revised as they do not have aspirations to become a commercial bank. They will only apply for the tier licensing which will be limited to deposit taking and micro banking. The group was recently awarded a provisional banking license in Namibia to add to the two existing ones in Rwanda and Mozambique. Letshego currently operates in 10 countries in Southern and Eastern Africa while still exploring to venture further in the West Africa.
In its latest financial performance, Letshego recorded an increase of 33 per cent of net advances to customers which translates into 4.4 billion while profits before tax increased by just one percent to reach P850.2 million.
Choppies – P4.9 billion
At P4.9 billion market capitalisation, Choppies Group is the third valuable company on the BSE as per the latest available statistics. A relatively new comer on the stock market compared to the other listed companies, Choppies has been on the rise in terms of exploring new possibilities in the market, resulting in the opening of several new stores in Zimbabwe and South Africa as well as in Botswana.
A market leader in mass grocery retail in Botswana, the group operates 107 stores in Southern Africa, 68 in Botswana, 26 in South Africa in addition to the 13 in Zimbabwe. Choppies listed on the BSE in January 2012 with an Initial Public Offering (IPO) of 1.2 billion shares listed at an offer price of P1.15 per share raising P350 million on both IPO and private placement. The IPO was said at the time to be the largest in the history of BSE. Since then the price share has increased to remain at an average of 420 thebe.
Anticipation of the opening of new stores in the current financial year is expected to further increase the retail group’s revenue which will in turn increase its worth. In its latest financial statements for the six months period ended 31 December 2013, the group revenue grew by 25 per cent while the operating profit swelled up by 26 per cent. In that period, the group value was increased by P500 million as total employment crossed the 10,000 mark.
Barclays - P3.7 billion
Despite posting uninspiring set of results for a notable period, Barclays Bank Botswana is maintaining its position in the top five when it comes to the market capitalisation as it currently boasts of a P3.7 billion , just a little head of another commercial bank which is valued at P3.6 billion as per by the end of this week.
Barclays Bank Botswana is under the leadership of Reinette van der Merwe. The bank chairman has admitted in the bank’s annual report that 2013 was a challenging year as reflected on financial results or as van der Merwe put it, “it was a year of rebirth”.
The bank spent the better part of 2013 laying the foundations that will edge it closer to its goal of being the ‘Go-To’ bank which increased its operating costs by 9.7 per cent and impacting on the overall performance.
Standard Chartered – P3.6 billion
Standard Chartered is imposing itself as the fast growing entity in the financial sector, at least according to the last few financial results which are equally translating into huge market capitalisation of P3.6 billion. The bank led by the chief executive Moatlhodi Lekaukau earlier this month released half year financial results which it termed “impressive set of results” as the income rose by 13 per cent.
Earlier this year, the bank rolled out its new One Bank Strategy with a refined organisational structure that concentrates on two main customer segment groups - Retail Clients and Corporate and Institutional Clients.
According to the Standard Chartered Bank Botswana directors, this allows the bank to bring more focus to the specific client segments and serve their needs from end to end in a seamless manner. This is said to be already paying dividends as the bank says it is already starting to realise some gains from this new development while excited about the added value it will bring to the bank’s clients.