BancABC Botswana has secured $10 million (P110 million) in additional capital for allocation towards its Small to Medium Enterprises portfolio, as part of its growth aspirations.
This week, the bank’s head of finance Ratang Molebatse said the funding was raised as per the normal course of business by engaging with lenders and showing them the strength of the business.
BancABC Botswana’s SME portfolio is a key part of the bank’s strategy to grow and break into the Big Four, the elite group comprising the country’s biggest commercial banks.
“The strategy is to diversify the retail business, grow the commercial banking business and lead in the SME sector while leveraging on digital transformation to increase market share,” she said.
BancABC’s loan book shrank to P6.2 billion in the first six months to June 30, 2020 compared to P6.4 billion at the end of December 2019, with executives noting that while retail lending continued to be the main driver, volumes were muted due to the delay in the expected public service salary increases.
The bank said the drop in loans in the first half of the year was also due to “unprecedented constrained economic activities” due to the pandemic.
BankABC Botswana posted P72.9 million in pretax profits for the six months to June 30, 2020, about 10% up from June 2019. Molebatse said before the onset of the coronavirus (COVID-19), the bank had enjoyed a strong first quarter with a nine percent increase in aftertax profits helped by momentum from 2019.
Molebatse said the bank employed cost-reduction measures on a variable cost, where possible, and continued to closely monitor operating expenses and costs within all business segments to maintain the appropriate funding for future investments.
“In addition, the commercial team has been successful in the reduction of interest expense,” she said. “As a result, both aspects were key drivers that boosted net interest income and the overall performance for the period.”
Molebatse said the bank had offered qualifying customers various debt relief measures to ease their financial burden. Some of the measures include discounts on transactional fees, an extension of loan tenures, capital repayment holidays and other personalised plans.
“We have also designed convenient and innovative ways for our customers to do their banking,” she said. “Our focus is to remain agile and respond timeously to the evolving customer needs and changing environment. “We remain focussed on all elements of our strategy, whilst ensuring that all our efforts as a business are aligned to deliver value for shareholders and other stakeholders in the long and medium-terms.”