Non-Performing Loans (NPL) fell four percent year-on-year from P894 million to P861 million while impairment charges dropped to P76.9 million from P96.7 million, recent filings with the Botswana Stock Exchange indicate.
The bank said the drop in NPLs was due to a recoverability assessment of long-outstanding exposure and the consequent write-off of irrecoverable loans, while the lower impairments came from a prior year which featured significant commercial write-offs.
The performance in NPLs and impairments was achieved despite a 12% increase in the loan book to P15.9 billion. Presenting the bank’s results last week, CEO Steven Bogatsu said FNBB maintains a prudent approach to lending and recognises the need for responsible and manageable consumer exposure during times of uncertainty.
He said this exposure includes the recent impact of high inflation and interest rate pressures.
“The bank has continued to deploy its financial resources appropriately and prudently with conservative capital and provisioning levels. “This has allowed the bank to respond to customer needs by extending credit extensively without relaxing its overall credit,” he said.
Within the loan book growth to P15.9 billion, retail advances experienced growth of 12% to P10.8 billion. This, the CEO said, rates strongly against the average market retail advances the growth of four percent.
“The cautious approach to retail lending over the pandemic resulted in a reduced advance in portfolio. Post the pandemic, and following the resumption of increased economic activity, growth in this portfolio has resumed,” he said.
The loan book associated with the bank’s corporate segment grew by 14% year-on-year while the commercial segment reflected a marginal growth of three percent due to a cautious risk appetite. The combined result of FNBB commercial and corporate advances was an increase of nine percent against market gross advances increasing by eight percent.
Meanwhile, the bank’s deposits from customers grew by six percent to P21.6 billion compared to the P20.4 billion that was recorded in the prior year’s corresponding period. Bank executives said the commercial segment experienced growth of eight percent aligned with strong customer growth while the retail segment remained flat and the corporate segment experienced moderate growth.
FNBB increased its investment securities during the half year, raising its holdings in treasury bills and bonds by 12% each while reducing its Bank of Botswana Certificate by 33%, as part of a strategy to acquire longer-dated investment securities with higher-yielding returns.
