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Barclays profits rise to P588 million

Barclays Bank Botswana continues to wave through tough trading environment and sluggish economic trends to deliver impressive measurable performance.

On Thursday the bank announced their financial results for the year ended December 2018. Delivered by the outgoing Managing Director Reneit van de Merwe the Bank raked in statutory profit before tax of P588 million, mirroring 5 percent  growth year-on-year when compared to the previous year ended  2017 December 31st.

According to Barclays Executives the performance was influenced by growth in income, contained costs and favourable expected losses. Removing the effect of separation costs the Bank’s normalised profit before tax registered a strong growth of 14 percent year-on-year.
"Once again our business showed resilience and tenacity and to this end we realized a Profit before tax (PBT) of P638 million for the year ending 31st December 2018.

This represents a year-on-year growth in profitability of 14 percent in comparison to the previous year on a normalized reporting basis. Our performance has been largely driven by Revenue growth, reduction in impairments and contained underlying cost growth. I am also pleased to note that all our business segments have remained profitable and continue to grow in line with our strategic drive,” said Mumba Kalifungwa Barclays, Finance Director.

On a gross basis, Interest income went up by 6 percent year-on-year, despite the interest rate cut of 50bps in the last quarter of 2017. However, an increase in the interest cost of funding driven by market trends diluted the net interest income growth resulting in the bank’s net interest income increasing marginally by 2 percent year on year. Net fee and commission income increased by 6 percent year- on –year. Kalifungwa further explained that this is on the back of the bank’s focus on driving innovation through investment and enhancement of digital channels.

Net trading income increased by 24 percent year-on-year. “This resulted from an increase in forex sales volumes and our continued focus on client acquisition and penetration; operating costs were well contained with the business achieving a cost to income ratio of 52 percent on removing the effect of Barclays plc separation costs. The ratio remains within our strategic target of the lower 50’s. Year-on-Year costs grew 5 percent removing the effect of Barclays plc separation costs.” Explained Kalifungwa

Effective 1 January 2018 a new accounting standard IFRS 9 replaced IAS 39 Financial Instruments: Recognition and measurement. To this end IFRS 9 introduced a revised impairment model which requires entities to recognise expected credit losses based on unbiased forward–looking information. This replaces the existing IAS 39 incurred loss model which only recognizes impairment if there is objective evidence that a loss was already incurred and measures the loss on the most probable outcome. According to Barclays the day 1 impact of this change that was charged to Retained earnings amounted to an after tax amount of P149 million.

However, despite the more stringent accounting for credit losses, the bank’s expected credit losses/ impairments decreased by 35 percent in comparison to the prior year. “The performance is attributable to our enhanced collections capability and conservative credit extension to high risk sectors mainly in the Retail segment” added Barclays Finance Director

Outgoing Managing Director Reinette van der Merwe said Barclays delivered results that underscore resilience as a business and reaffirms confidence that the bank will continue to capture growth opportunities in the market. “Despite the headwinds, we made progress and remain optimistic to reclaim our number one position as the leading financial services provider in our market focusing on exceptional customer service and bringing possibilities to life, our journey to build a scalable digitally-led business is one key pillar of our Absa Group strategy and we are ready to become a truly transformative bank that is modern, fast- thinking and relevant for future,” she said

Barclays registered a solid balance sheet of 12 percent growth in comparison to the previous year ended 31 December 2017. The Bank Exco further explained that the Balance sheet growth was influenced by customer’s loans which increased by 10 percent year- on-years to P11.8 billion. “This growth was fairly distributed across the segments in line with our strategy and continues to be focused around prudent lending in our chosen business segments, Customer deposits increased 8% year-on-year driven by continued customer focus and penetration across all the segments. Our focus in the short and medium term is to optimize our balance sheet, whilst focusing on revenue generating opportunities,” further shared Merwe.

Reinette Van der Merwe also  confirmed that she will be leaving Barclays end of this month with the new MD Keabetswe Pheko-Moshagane taking over officially on April 1, 2019.“In the past five years we have grown the revenue contribution from the Corporate and Business Banking portfolio from 19 percent in 2014 to 29 percent in 2018. We have made significant progress in Business Banking as we delivered the customer value propositions whilst creating strategic partnerships to provide credit guarantees to the underserved small businesses. Testimony to this is our Enterprise & Supply Chain Development offering that was launched in 2017. We continue to innovate ensuring that our Digital solutions are inclusive to our Business Banking customers,” she said.

Barclays Chairman of the Board of Directors Oduetse Motshidisi officially unveiled Pheko-Moshagane as the incoming MD, succeeding Van de Merwe, who has been at the bank for five years. Motshidisi said Pheko-Moshagane has held different positions within the bank. Mogashagane shared that going forward creating a thriving organization, growing corporate and business banking portfolios in our chosen sectors as well as investing in technology and strategic partnerships in pursuit of building a customer centric digitally-led bank will remain key pivotal priorities to Barclay’s strategy going into the future.

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Business

Food prices continue to rise, but at a slower rate

28th November 2022

Prices for cereals or staple foods in Botswana and other Southern African countries continue to rise at a slower pace, following trends in the global markets, according to the latest November 2022 Food Price Monitoring and Analysis by Food Agricultural Organization (FAO) of the United Nations.

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Still doing business the old way?

18th November 2022

It’s time to get business done better with MTN Business Botswana’s ICT Solutions.

Running a digital businessMTN Business Solutions Botswana, popularly known as MTN Business is an Internet Service Provider. We are a subsidiary of MTN Group Limited, a multinational telecommunications Group headquartered in South Africa, which operates in 19 markets across Africa and the Middle East.

More and more, clients are looking for ways to keep their staff productive in a dynamically changing business environment. Whether your people are working from home, the office or abroad, there is a growing recognition that digitising your operations can offer unprecedented commercial value in flexibility, productivity and growth. This new, digital reality means that it is more important than ever to stay agile – if there is anything that can slow a business down, it is being burdened by othatld technology.

Having made substantial investments in fibre technology, high-speed terrestrial and undersea networks and new frequency spectrum across the markets wherein it operates, MTN is perfectly positioned to respond to this shift in the market.

A few years ago, MTN also made the decision to build an IP capable radio network for its mobile services, giving its core network the ability to seamlessly integrate with enterprise IP networks. The mobile towers deliver services to enterprise clients absolutely anywhere it has a network, shortening the last mile and removing complexity and cost.

Now there is increasing demand from clients to connect their remote sites in all areas, including rural and semi- rural. MTN has assisted clients with overcoming this connectivity hurdle, enabling their staff to get the job done wherever they are.
MTN’s evolution

For MTN, the focus has shifted from just being a core telecommunications services provider, towards also becoming a technology solutions provider. The service offering now also includes Unified Communications, Data Hosting and Cloud Solutions, Security-As-A-Service and Managed Network Services. The scope has changed to being client and industry specific, so the requirements and service portfolio vary from one client to the next. The expectation is that a company like MTN must respond to these challenges, helping clients to get business done better as they shift from old to new technologies.

As many businesses continue to grapple with a digitally dynamic world, they face new challenges that have to be solved. This environment will benefit those that are more digitally enabled and agile. It is a brave new world that will favour online over on-site, wireless over wired and fluid over formulaic. Businesses will seek out partners and suppliers that are every bit as flexible and forward-looking as they are.
Ultimately, clients need partners like MTN Business that will invest in infrastructure, deliver the services they require, have market credibility, are financially sound and have a long-term commitment to their market presence.

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Business

BIE to vitalize the Dignity of Engineers

9th November 2022

Botswana Institution Of Engineers (BIE), has last week hosted a gala dinner in  which they appreciated engineers who worked tirelessly and with dedication for 10 years from 1983 to steer the BIE to its current status.

The event that was held at the Phakalane Golf Estate had brought together young, experienced and veteran engineers and was held under the theme “Vitalize the dignity and eminence of all professional engineers”.

Explaining the theme, the institution’s treasurer, Thanabalasingam Raveendran said that engineers were looked upon reverentially with respect as the educated but with time it seems to have deteriorated. He indicated that there is a need to change the narrative by all means.

“The BIE exists for the welfare and the betterment of us Botswana engineers, we need to recognize specialised units within our Institution. We Engineers strongly believe in Engineers make it happen” Raveendran said.

He indicated that under the theme they appeal to all engineers to energize, to attain quality of being worthy of honour and respect and to achieve recognized superiority amongst the Society.

Raveendran stated that engineers need to ensure their end product is of good quality satisfying the end users expectations and engineers must be honest in their work.

“Approximately 8000 engineers registered with Engineering Regulatory Board (ERB) are not members of the BIE, engineers need to make every effort to recruit them to BIE” he said.

He alluded that BIE being a society, it currently needs to upgrade itself at par with professional institutions elsewhere like the UK and USA.

He further stated that BIE has to have engineering units of specialised disciplines like Civil/Mechanical/electrical etc

“As President Masisi indicated in his inaugural speech, the young people, who make 60 percent of the population of this country, are the future leaders and therefore investing in them is building the bridge to the future” said Raveendran

Kandima indicated that BIE has a memorandum of Understanding with Engineers Registration Board (ERB), where BIE is a recognised provider of CPD training, mentorship programmes and more importantly IPD undertaking to upgrade the skills and know-how of our engineers.

“For us to achieve our mandate and make worthwhile changes to engineering in Botswana, we have to be totally focused and act with intent” said Kandima.

Furthermore, Stephen Williams, past president of the BIE from 1986-1988 told the engineers that  the BIE provides a fertile environment where they can meet, share ideas and grow professionally.

“The BIE is also a nesting place for graduate engineers to learn from their peers and seniors, it also cater for engineering technicians and technologists and so nobody in the technology field is left out” he said.

He further indicated that Botswana Government provides a conductive environment for growth of engineering professionals.

“It must be stated that the Botswana Government recognises the existence of BIE and it can further be stated that the government enables ERB to carry out its mandate as a regulator of engineering professionals” said Williams

He plead with engineering companies to recognize and support BIE as it is the only source of engineering personnel’s for various Industries .

Furthermore, when giving his farewell speech, Michael Pinard , a past president of the institution  said how they are viewed as engineers by the general public might be due to some lack of appreciation as to exactly what role they play in the development of the country.

“The BIE slogan is aptly coined-Engineers make it happen, in other words, what man dreams engineers create” Said Pinard.

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