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      Tumisang Orebonye: Overcoming Against Adversity to Reach for the Stars

      ‘Winning The CAF Super Cup Is A Dream Come True’ – Orebonye

      BAA Needs Over P3m For World Champs

      Botswana’s Sporting Future in Jeopardy: School Sports Suspension Threatens Athletic Excellence

      No House For Tebogo Despite Astral Performance in Budapest

      “No Pressure for Tebogo at Diamond League Finals”

      BOKA Aims to Host Two Prestigious International Karate Competitions

      BOKA Aims to Host Two Prestigious International Karate Competitions

      FM Botswana 2022 conference: transformation towards a greener FM 

      StanChart CEO Underscores Role of UB Marathon in Boosting Botswana’s Sports Tourism

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      Home Companies & Markets

      Absa projects double-digit growth in revenue

      mm by Kabelo Adamson
      September 14, 2023
      in Companies & Markets
      Reading Time: 2 mins read
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      Absa projects double-digit growth in revenue

      Keabetswe Pheko Moshagane Absa MD. Pic Gaolathe Rulaganyang

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      Despite the anticipated headwinds in the operating environment, Absa Bank Botswana remains resolute in growth and prosperity and said a strong balance sheet will enable it to capitalise on the vast opportunities offered by the market, the bank’s Managing Director (MD), Keabetswe Pheko-Moshagane has said.

      She was speaking during the 2023 interim results presentation on Thursday in Gaborone. Pheko-Moshagane said Absa expects its revenue to grow in the double digits range, Return on Equity (ROE) to remain within the mid 20’s, and cost-to-income ratio to be in the lower 50’s.

      In the near term, Pheko-Moshagane said the bank will focus on continuous improvement and enhancement of its technology platforms, participate in growing meaningfully in various sections, and maintain a sound balance sheet with adequate capital and liquidity levels. Absa will also focus on delivering on its ESG commitments, with deliberate efforts to achieve ambitions of being a leader in sustainable finance in the domestic market in line with the government reset and mindset change agenda, Pheko-Moshagane noted.

      Pheko-Moshagane said Absa’s delivery against the shared strategy is evidenced by yet another solid financial performance. During the period under review, Profit before tax increased by 13 percent, pre-provision profit increased by 21 percent while revenue grew 17 percent year on year. During the same period, cost-to-income ratio declined to 52 percent from 54 percent.

      “Pleasingly, our Return on Equity continued on the growth trajectory, increasing to 26 percent from 23 percent in the prior year,” she said. “We still run a solid bank with a Capital adequacy ratio of 2 percent, enabling a 19 percent growth in interim dividend.” The Absa Bank Botswana stated that the bank has made good progress in its growth ambitions across its business segments. “This affirms our commitment of being a primary and strategic partner for our customers, and in turn, deliver shareholder value,” she said.

      For the period, Absa recorded a revenue of a little over P1 billion, an increase of 17 percent from the previous corresponding period. “Our revenue is now at a position higher than pre-COVID levels, which depicts the recovery of our business post the COVID slump,” said Absa Finance Director, Cynthia Morapedi. “At a segmental level, our RBB franchise total revenue grew by 8 percent while the Corporate and Investment Banking arm grew 41 percent.”

      Within this revenue growth, Morapedi said gross interest income increased 31 percent, which she indicated was achieved by a compound of the momentum the bank saw in its loan book together with an improved return on our portfolio assets. “The growth in interest income was negated by the increase in interest expense of 52 percent,” she said. Due to inflation and other economic constraints, Absa says its customers’ ability to save was impacted.

      “Businesses also experienced delayed conversions due to supply chain disruptions and thereby the cost of doing business escalated,” revealed Morapedi. “These factors impacted market liquidity and led to a sharp rise in the market cost of deposits, hence the increase in interest expense.” This therefore culminated in net interest income growth of 23 percent year on year. According to Morapedi, growing non-interest income remains a key priority for Absa.

      “We will continue with our strategic intent to drive fee income and make sure that we diversify our revenue streams,” she asserted. “On aggregate, gross fee and commission income grew by 8 percent year on year.” This performance, Morapedi explained, was backed by the significant recovery in sales and trading portfolio due to a material improvement in transactional volumes as well as improved product uptake.

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