BSB profits up 147% despite challenges
Otlarongwa Kgweetsi | Monday January 22, 2024 06:00
Half year results shared with investors on the Botswana Stock Exchange (BSE) this week attribute the profit before tax growth to higher fee and commission income, which witnessed a substantial increase of 105% year on year, primarily driven by the improved performance of savings accounts.
Total expenses increased by 5% year on year, largely due to the bank's investment in its digitisation journey. Directors said the BSB’s focus now is to have 200 new agency branches and launch a digital banking solution. Expenses during the period included investments in various IT solutions to enhance the bank's cyber security framework.
“Interest income was P162.5 million, up nine percent annually, reflecting the benefits of the increases in the Monetary Policy Rate by the Bank of Botswana in May, June and August 2022. September 2023 had the full benefit of the rate increases compared to September 2022,” the directors said.
On the challenges faced during the reporting period, the directors observed that the rise in interest rates had a negative impact on the bank's loan book, with customers finding it challenging to meet the affordability measures set by the bank, resulting in limited loan book growth. The directors said as loans are the primary source of revenue for the bank, the situation poses a challenge to its overall financial performance.
“Looking ahead, BSB aims to capitalise on its investments in new products and channels to drive growth in its loan book and better serve clients in under-banked areas of Botswana,” the directors said.
“The bank plans to achieve this through the continuous roll-out of agency banking channels. These initiatives will enable the bank to offer everyday banking solutions to a larger population, including those in remote areas.”