FNBB profits pass P1billion mark
First National Bank Botswana (FNBB), the country’s largest commercial bank by all key measures has raked in over P1 billion in profits before tax for financial year ended 30 June 2022, a history achievement for any commercial bank in Botswana.[ihc-hide-content ihc_mb_type=”show” ihc_mb_who=”1,2,3″ ihc_mb_template=”1″ ]
The bank, listed on Botswana Stock Exchange (BSE) hinted this milestone on Tuesday in a circular to its shareholders. In the statement, FNBB informed its shareholders and investors that the company’s overall profit before tax for the twelve-month period ended 30 June 2022 will be higher than that reported in the previous corresponding period by between 30 percent and 35 percent, which in number terms is an increase of between P270 million and P315 million.
The profit before tax for the corresponding period ended 30 June 2021 was P901 million. According to the expectation and foresight by FNBB, at the lower bound projection of 30 percent increase, meaning P270 million, the bank’s profits will clock past P1.1 billion, a figure never achieved ever before in the local banking space.
FNBB shareholders were, however, cautioned that the financial information on which this trading statement is based has not been audited by the external auditors. The full details will be provided to shareholders at the time of the announcement of the audited financial results for the twelve-month period ended June 2022, due to be released on 15 September 2022. Accordingly, shareholders were advised to exercise caution when dealing in the company’s securities until a full announcement is made.
FNB is by far Botswana’s largest commercial bank, this banking giant has been expanding its customer base and buttressing its position as the country’s biggest by all key measures; balance sheet, loan book, and market share.
Taking a look at the bank’s performance for the past five (5) financial years paints a picture of a banking behemoth in an unprecedented growth trajectory never seen before in Botswana’s local banking industry. For the full-year period ended 30 June 2017, profit before tax grew by 3 percent to P680 million from P659 million recorded in the prior year ended June 2016.
For the financial year ended 30 June 2018, the bank raked in Profit before direct taxation of P838 million from P680 million registered in the prior year, mirroring a whopping 23 percent jump. The following year which ended 30 June 2019, Profit before direct taxation grew by 13 percent to P945 million from the previous year’s figure of P838 million.
At the beginning of 2020, the bank reported a Profit before direct taxation of P544 million for the interim period (6 months) ending 31st December 2019, a 13 percent jump from P481million reported for the corresponding six months’ period ended December 2018.
However, when presenting the full-year results for the period ended 30 June 2020, the Bank Executives announced a 5 percent drop in profits to P900 million from P945 million registered in full-year 2019, mainly driven by the impacts of COVID-19 in the first 6 months of 2020 (second half of FNBB’s reporting year).
For the full-year ended 30 June 2021, the bank registered flat performance growth when compared to the previous year, with profit before tax moving up slightly to P900, 855,000 from P900, 851, 00 in the previous year, still attributable to COVID-19 volatilities.
Botswana’s banking industry is anchored by three (3) banking giants, all subsidiaries of African banking behemoths headquartered in South Africa, the continent’s most advanced economy. These being First National Bank Botswana – a subsidiary of First Rand, Absa Bank Botswana – a subsidiary of Absa Group and Stanbic – a subsidiary of Standard Bank Group, Africa’s biggest by assets.
Other banking players in the local market are Standard Chartered Bank Botswana and Access Bank Botswana – a subsidiary of Access Bank PLC, Africa’s biggest by customer base. First National Bank Botswana has however over the years established itself as a cut above the rest in terms of profitability and marker share, anchored predominantly by its retail segment which resonates well among the middle class populace with cash spinning services such as e-wallet.
In the 2021 financial year, the banking industry was profitable, with net after-tax profit increasing by 24.4 percent from P1.5 billion to P1.8 billion for 2021, largely reflecting improved business activity. This is according to the Bank of Botswana 2021 Annual report released last month.
Banks maintained good quality assets in 2021, with a decline in credit default rates. The ratio of NPLs to gross loans and advances declined from 4.3 percent in December 2020 to 4.2 percent in December 2021.
However, the central bank which is the statutory regulator of all commercial banks in Botswana noted that there continues to be a risk to asset quality associated with the high proportion of the relatively more expensive unsecured lending (at 72.5 percent of household credit in December 2021) in commercial bank credit.
The average capital adequacy ratio (CAR) and liquid asset ratio (LAR) for the banking industry were 18.6 percent and 16.6 percent, respectively, in December 2021, both higher than the minimum prudential and statutory thresholds of 12.5 percent and 10 percent, respectively, indicating that the banking industry was adequately capitalised and liquid.
Overall, the statement of financial position for the banking sector grew, with total assets increasing by 4.6 percent from P103.6 billion in December 2020 to P108.4 billion in December 2021.
Loans and advances, which constituted 63.6 percent of assets, rose by 5.1 percent to P68.9 billion in December 2021 compared with P65.6 billion in December 2020. With regard to liabilities, customer deposits increased by 3.6 percent, from P81.2 billion to P84.1 billion in the same period.[/ihc-hide-content]
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Nigerians, Zimbabweans apply for Chema Chema Fund
Fronting activities, where locals are used as a front for foreign-owned businesses, have been a long-standing issue in Botswana. These activities not only undermine the government’s efforts to promote local businesses but also deprive Batswana of opportunities for economic empowerment, officials say. The Ministry of Trade and Industry has warned of heavy penalties for those involved in fronting activities especially in relation to the latest popular government initiative dubbed Chema Chema.
According to the Ministry, the Industrial Development Act of 2019 clearly outlines the consequences of engaging in fronting activities. The fines of up to P50,000 for first-time offenders and P20,000 plus a two-year jail term for repeat offenders send a strong message that the government is serious about cracking down on this illegal practice. These penalties are meant to deter individuals from participating in fronting activities and to protect the integrity of local industries.
“It is disheartening to hear reports of collaboration between foreigners and locals to exploit government initiatives such as the Chema Chema Fund. This fund, administered by CEDA and LEA, is meant to support informal traders and low-income earners in Botswana. However, when fronting activities come into play, the intended beneficiaries are sidelined, and the funds are misused for personal gain.” It has been discovered that foreign nationals predominantly of Zimbabwean and Nigerian origin use unsuspecting Batswana to attempt to access the Chema Chema Fund. It is understood that they approach these Batswana under the guise of drafting business plans for them or simply coming up with ‘bankable business ideas that qualify for Chema Chema.’
Observers say the Chema Chema Fund has the potential to uplift the lives of many Batswana who are struggling to make ends meet. They argue that it is crucial that these funds are used for their intended purpose and not siphoned off through illegal activities such as fronting. The Ministry says the warning it issued serves as a reminder to all stakeholders involved in the administration of these funds to ensure transparency and accountability in their disbursement.
One local commentator said it is important to highlight the impact of fronting activities on the local economy and the livelihoods of Batswana. He said by using locals as a front for foreign-owned businesses, opportunities for local entrepreneurs are stifled, and the economic empowerment of Batswana is hindered. The Ministry’s warning of heavy penalties is a call to action for all stakeholders to work together to eliminate fronting activities and promote a level playing field for local businesses.
Meanwhile, the Ministry of Trade and Industry’s warning of heavy penalties for fronting activities is a necessary step to protect the integrity of local industries and promote economic empowerment for Batswana. “It is imperative that all stakeholders comply with regulations and work towards a transparent and accountable business environment. By upholding the law and cracking down on illegal activities, we can ensure a fair and prosperous future for all Batswana.”
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Merck Foundation and African First Ladies mark World Health Day 2024
Merck Foundation, the philanthropic arm of Merck KGaA Germany marks “World Health Day” 2024 together with Africa’s First Ladies who are also Ambassadors of MerckFoundation “More Than a Mother” Campaign through their Scholarship and Capacity Building Program. Senator, Dr. Rasha Kelej, CEO of Merck Foundation emphasized, “At Merck Foundation, we mark World Health Day every single day of the year over the past 12 years, by building healthcare capacity and transforming patient care across Africa, Asia and beyond.
I am proud to share that Merck Foundation has provided over 1740 scholarships to aspiring young doctors from 52 countries, in 44 critical and underserved medical specialties such as Oncology, Diabetes, Preventative Cardiovascular Medicine, Endocrinology, Sexual and Reproductive Medicine, Acute Medicine, Respiratory Medicine, Embryology & Fertility specialty, Gastroenterology, Dermatology, Psychiatry, Emergency and Resuscitation Medicine, Critical Care, Pediatric Emergency Medicine, Neonatal Medicine, Advanced Surgical Practice, Pain Management, General Surgery, Clinical Microbiology and infectious diseases, Internal Medicine, Trauma & Orthopedics, Neurosurgery, Neurology, Cardiology, Stroke Medicine, Care of the Older Person, Family Medicine, Pediatrics and Child Health, Obesity & Weight Management, Women’s Health, Biotechnology in ART and many more”.
As per the available data, Africa has only 34.6% of the required doctors, nurses, and midwives. It is projected that by 2030, Africa would need additional 6.1 million doctors, nurses, and midwives*. “For Example, before the start of the Merck Foundation programs in 2012; there was not a single Oncologist, Fertility or Reproductive care specialists, Diabetologist, Respiratory or ICU specialist in many countries such as The Gambia, Liberia, Sierra Leone, Central African Republic, Guinea, Burundi, Niger, Chad, Ethiopia, Namibia among others. We are certainly creating historic legacy in Africa, and also beyond. Together with our partners like Africa’s First Ladies, Ministries of Health, Gender, Education and Communication, we are impacting the lives of people in the most disadvantaged communities in Africa and beyond.”, added Senator Dr. Kelej. Merck Foundation works closely with their Ambassadors, the African First Ladies and local partners such as; Ministries of Health, Education, Information & Communication, Gender, Academia, Research Institutions, Media and Art in building healthcare capacity and addressing health, social & economic challenges in developing countries and under-served communities. “I strongly believe that training healthcare providers and building professional healthcare capacity is the right strategy to improve access to equitable and quality at health care in Africa.
Therefore, I am happy to announce the Call for Applications for 2024 Scholarships for young doctors with special focus on female doctors for our online one-year diploma and two year master degree in 44 critical and underserved medical specialties, which includes both Online Diploma programs and On-Site Fellowship and clinical training programs. The applications are invited through the Office of our Ambassadors and long-term partners, The First Ladies of Africa and Ministry of Health of each country.” shared Dr . Kelej. “Our aim is to improve the overall health and wellbeing of people by building healthcare capacity across Africa, Asia and other developing countries. We are strongly committed to transforming patientcare landscape through our scholarships program”, concluded Senator Kelej.
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Interpol fugitive escapes from Botswana
John Isaak Ndovi, a Tanzanian national embroiled in controversy and pursued under a red notice by the International Criminal Police Organization (Interpol), has mysteriously vanished, bypassing a scheduled bail hearing at the Extension 2 Magistrate Court in Gaborone. Previously apprehended by Botswana law enforcement at the Tlokweng border post several months earlier, his escape has ignited serious concerns.
Accused of pilfering assets worth in excess of P1 million, an amount translating to roughly 30,000 Omani Riyals, Ndovi has become a figure of paramount interest, especially to the authorities in the Sultanate of Oman, nestled in the far reaches of Asia.
The unsettling news of his disappearance surfaced following his failure to present himself at the Extension 2 Magistrate Court the preceding week. Speculation abounds that Ndovi may have sought refuge in South Africa in a bid to elude capture, prompting a widespread mobilization of law enforcement agencies to ascertain his current location.
In an official communiqué, Detective Senior Assistant Police Commissioner Selebatso Mokgosi of Interpol Gaborone disclosed Ndovi’s apprehension last September at the Tlokweng border, a capture made possible through the vigilant issuance of the Interpol red notice.
At 36, Ndovi is implicated in a case of alleged home invasion in Oman. Despite the non-existence of an extradition treaty between Botswana and Oman, Nomsa Moatswi, the Director of the Directorate of Public Prosecution (DPP), emphasized that the lack of formal extradition agreements does not hinder her office’s ability to entertain extradition requests. She highlighted the adoption of international cooperation norms, advocating for collaboration through the lenses of international comity and reciprocity.
Moatswi disclosed the intensified effort by law enforcement to locate Ndovi following his no-show in court, and pointed to Botswana’s track record of extraditing two international fugitives from France and Zimbabwe in the previous year as evidence of the country’s relentless pursuit of legal integrity.
When probed about the potential implications of Ndovi’s case on Botswana’s forthcoming evaluation by the Financial Action Task Force (FATF), Moatswi reserved her speculations. She acknowledged the criticality of steering clear of blacklisting, suggesting that this singular case is unlikely to feature prominently in the FATF’s assessment criteria.