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Absa Group walks high against a tough 2019

The year 2019 was altogether a tough business year for most businesses, but Absa Group Limited moved heavily against the gravity of challenging macroeconomic backdrop and the sluggish South African economy.

Absa Group known in full as Amalgamated Banks of South Africa, is a pan African financial group offering personal and business banking, corporate and investment banking, wealth and investment management as well as bank assurance. Absa group has its presence in 12 African countries and plans to open international offices in the United Kingdom and the United States. According to Absa Group audited consolidated financial results for the reporting period ended 31 December 2019 released this week, the group put up its numbers with an improvement in its revenue and with headline earnings.

Absa Group Chief Executive Officer Daniel Mminele said they delivered a resilient performance, adding that the bank managed to maintain balance sheet momentum and growth was broad-based across most businesses. The financial results also states that revenue saw an increment of six percent while headline earnings, the measure most analysts use to gauge profit, rose 1 percent as impairments increased.

‘’Our revenue growth is showing an improving trend, with strong deposit growth of 12 percent and customer loan growth of 9% for the Group,’’ said Absa Group Financial Director Jason Quinn. Overall, Absa’s balance sheet, revenue and earnings growth were in line with peers after lagging for a number of years. The Absa Regional Operations business, comprising Absa Group’s African operations excluding South Africa, delivered strong financial performance in 2019 with earnings growth of 16 percent (12% in constant currency), enhancing the overall Group’s position.

 ‘’We are pleased with the results of our regional operations and their contribution to Absa Group’s overall performance, having maintained double-digit growth and growing our headline earnings. We look forward to continuing to grow our revenue market share on the continent over the coming years,’’ Regional Operations CEO Peter Matlare said. He further noted that Absa Group is optimistic about the future and the opportunities that lie ahead united under one Absa across their African markets.

Their objective, he said, is to develop strong, digital first financial systems in a sustainable manner and to contribute positively to the development of communities in which they operate. ‘’The publication of our parent company, Absa Group’s results publishing comes just barely after the completion of our brand transition and we are excited about the journey ahead as Absa Bank of Botswana. Collectively our values and journey is one of striving  to be customer obsessed, acknowledging the strength of our people and delivering results sustainably,’’ said Keabetswe Pheko-Moshagane, Absa Bank of Botswana Chief Executive Officer.

Absa Group launched its growth strategy in March 2018 after Barclays PLC ceased to be the controlling shareholder in the Pan African banking group. The group is now working to complete its separation programme, one of the largest in the banking sector in terms of size and complexity. According to Absa Group audited consolidated financial results for the reporting period ended 31 December 2019, the regional operations recorded growth in revenue of 14 percent, pre-provision profits that grew by 17 percent as well as cost-to-income ratio that improved by 57.8 percent. While separating, ARO has grown its retail primary customer base in 2019 to 1.5 million customers.

Further, gross loans and advances grew by 7 percent to R530 billion, deposits grew by 10 percent to settle at R373 billion while non-interest income grew by 6 percent. Cost-to-income ratio saw a significant improvement from 57.7 percent in 2018 to 58.4 percent in 2019. Customer growth only saw an advance of 1 percent to become 9.7 million. The group also saw market share growth in retail deposits and retail loans and advances, including personal loans, new home loans and vehicles.

Absa Group also saw growth in corporate and investment banking, which was driven by strong performance in countries outside South Africa, which partially offset a decline in earnings in South Africa. There was a continued growth momentum in ARO with total income growing 15 percent to R7.4 billion, and also a solid income growth from corporate bank franchise of 9 percent to R10.6 billion. Absa Group also realised a strong growth momentum in the trade finance business in South Africa, with a CAGR of 19 percent in the last four years.

According to the group’s financials, ordinary dividend of 620 cents per ordinary share was declared on 11 March 2020, for the period ended 31 December 2019. The ordinary dividend is payable to shareholders recorded in the register of members of the company at the close of business son Friday, 17 April 2020.

The Directors of Absa Group Limited confirm that Absa Group will satisfy the solvency and liquidity test immediately after completion of the dividend distribution. Absa says the dividend will be subject to local dividends withholding tax at a rate of 20%. The dividend has been declared out of income reserves, and the gross local dividend amount is 620 cents per ordinary share for shareholders exempt from the dividend tax.

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China’s GDP expands 3% in 2022 despite various pressures

2nd February 2023
China’s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.

The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The country’s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.

In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.

Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.

China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.

Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.

On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.

According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.

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Jewellery manufacturing plant to create over 100 jobs

30th January 2023

The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.

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Investors inject capital into Tsodilo Resources Company

25th January 2023

Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.

According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.

The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.

Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.

Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the company’s market capitalization.

Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana.  The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.

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