FNBB banks on innovation to counter moratorium
Boitshepo Majube | Wednesday February 26, 2014 15:03
Announcing their results in Gaborone last week FNB CEO, Lerato Boakgomo-Ntakhwana said FNB has a diversified portfolio, and they would be more innovative in their non-interest income portfolio to caution the impact of the moratorium.
“When one portfolio in the market is not doing well, we compensate it with a portfolio that is doing well. This is because as FNB we have a diversified portfolio,” Ntakhwana said.
She stated that they would have to add to their product offering, and make them more attractive to consumers in order to boost business. “We will be launching new products to the market, adding on to our diversified income,” she said, citing prepaid electricity platform as one of those products.
In their half-year results ended December 2013, FNB achieved a 6 percent growth on total balance sheet. The Bank also achieved a 7 percent growth in deposits by customers from customers, achieving a growth faster than the market. FNB recorded 5 percent profits after tax (P362 million) in the reporting period.
“The results were largely driven by the substantial growth in new business for the period under review,” the bank stated. FNB further stated that household lending grew driven by the appetite for property.
Ntakhwana said the bank is expected to continue in realising its overall strategy to move customers away from the more expensive traditional banking structures to cheaper banking channels; this, in an effort to build upon robust results and achievements for the first half of the year and taking into consideration the tough trading environment.
On what she thinks of the moratorium, Ntakhwana said the Banking Association of Botswana (BAB) is carrying out the study, which will inform the banking sector going forward.
The BAB’s tariff study comes in the wake of the Bank of Botswana’s moratorium on further increases to banking charges and fees, imposed earlier this year. The central bank’s decision was based on long running and widely held sentiments that rising bank charges and fees were not only an impediment to banking access, but also a disincentive to savings.
Meanwhile, FNBB stated that Botswana has witnessed the lowest interest rate environment seen in 20 years with the bank rate cut by 200 basis points. “This reprieve in interest rates has led to an expansion in credit growth driven by the Consumer segment. Loans are also more affordable to the consumer,” It said. Despite the positives, Ntakhwana said consumers are under pressure, and are struggling to save.