Banking sector profits grows, despite poor service

Boitshepo Majube | Friday December 20, 2013 11:48

 

Four major banks (First National Bank, Standard Chartered Bank, Barclays Bank and Stanbic Bank) continued their domination of the local banking market.

However, some small banks, notably BancABC recorded significant growth this year. First National Bank of Botswana balance sheet continued to increase in advances with the year on year growth registering an impressive 23 percent to close at a book record of P10 billion.

Standard Chartered Bank’s balance sheet strengthened with loans to customers increasing by 26 percent to P5,7 billion and deposits from non-bank customers rising by 5 percent to P7,7 billion. The banks earnings per share went up 9 percent and dividends per share were 220 percent above the same period in 2012.

Barclays was the only major bank with results showing an 18.4 per cent decline on its profit after tax year on year. Van der Merwe, an audit professional, became the first foreigner to head the bank in more than 10 years as it restructures under its ‘One Africa’ strategy. She will have to apply herself to turn the tide as the half year, 30th June, 2013 results show that net interest income dropped by 3 per cent due to a higher interest expense of P141,5 million, which was 12 per cent higher than that for the period to 30th June, 2012. Both the retail and corporate banking divisions saw significant declines of 9.6 per cent and 27.8 percent respectively. On the other hand, the Bank of Botswana and government expressed concern that despite high levels of profitability and solvency, the banking system generally does not seem to invest adequately in human capital, payment infrastructure, public education and other social projects.

Vice President Ponatshego Kedikilwe called upon Banks to streamline the multiplicity of bank transaction charges, including avoiding onerous fees on savings accounts. He said the charges are a disincentive to savings mobilisation, especially for the low-income group.

“What is equally undesirable is the high bank charges that are not commensurate with the quality of banking services in Botswana, as reflected in slow service at bank counters, long queues at banking halls and ATMs, especially at month end,” he lambasted.