- Disburses P4bn
First National Bank Botswana (FNBB) has increased its efforts in sustainability financing by investing capital in a solar farm project to promote green energy.
According to the banks’ financial year ended June 30, 2024, the biggest bank on the stock market by market capitalisation disbursed P4 billion towards the promotion of green energy. This represents a P800 million increase when compared to the P3.2 billion disbursed in the previous financial year.
The bank said the disbursements cover both long-term loans to individuals and businesses.
“We did new things we have not done before, we disbursed funds for a green building to one of our corporate clients,” FNBB Chief Financial Officer, Dr. Mbako Mbo, revealed during the results presentation.
The Botswana Stock Exchange (BSE) listed bank is proud of its investment in the Selebi Phikwe citrus project and vowed to continue backing it.
“This was just the beginning,” Mbo echoed an optimistic note. “More is yet to come.”
He said the investment contributed to the bank’s balance sheet. Mbo also revealed that Wesbank portfolio is stabilising after years of decline. This comes after the bank reviewed the vehicle loan scheme and engaged its stakeholders.
“We simplified the processes, we listened to the dealerships and came up with arrangements that work for the dealerships as well,” he said.
“This product is behind the significant growth that we saw with our commercial segment in 2024, same applies to the SMMEs, we are supporting 133 of them through the Firstpreneuer programme.”
For the period under review, Wesbank portfolio grew by 52 percent, thus driving the overall 16 percent growth in Commercial and Corporate (RMB) loans.
When it comes to home loans, Mbo said the bank has not achieved as much as it wished.
“For some reason which we are trying to find out, the home loans do not actually perform very well in this country,” said Mbo.
“We are at work, speaking to customers, we are looking at our own processes and our own parameters and variables and we believe that we will crack this piece in no time.”
Mbo said the bank is fully aware that cracking this piece may come with some level of cannibalisation of the personal loan book.
However, he said that would still be fine as the bank believes financing homes is the right thing to do.
On transactions, Mbo stated that the story remains the same, with growth driven by the fundamentals of the business.
“Ewallet remains one of our most popular products amongst our customers,” he said.
“Last year, we facilitated 14.4 million transactions across our platforms on e-wallet. This year it was 16 million, a 15 percent increase in volumes.”
Mbo said the bank has seen an improvement in the utilisation of various channels through which the bank avails e-wallets to customers.
Cash Plus, one of the flagship products for the bank also experienced growth.
Last year, the bank had 1,099 agents across the country and by the close of the current period, there were 1,481 Cash Plus agents countrywide.
“With those agents, we had an active customer base of 240,000 as at last year. When we closed our financial year this time around, the count was 331,000” Mbo disclosed.
“This is a decent year-on-year growth, and these are the sort of things that are driving growth at FNBB.”
FNBB facilitated 4.7 million Cash Plus transactions in 2023, which grew to 6.7 million in 2024.
Merchant businesses also grew from transactions worth P54 billion in 2023 to P63 billion in 2024.
There are a few other transactions that the bank offers to its customers for free such as electricity sales; FNBB facilitated 3.5 million sales last year which grew to 3.6 million this year at a zero cost to customers.
“We used to charge this but we reflected and thought it is too important a service to really incur a cost,” Mbo said.
“When our customers receive e-wallets, they visit ATMs and we don’t charge them for withdrawal.”
All these figures contributed to FNBB achieving a total income of P3.5 billion, a 31 percent y/y growth from P2.9 billion last year.
“Both income-generating streams were up, starting with our interest-earning business. Our topline was P2.4 billion this year, which is a 23 percent increase,” Mbo explained.
“But we had to respond obviously to the declining interest rates and we did that by managing the deposit base.”
FNBB did this by relooking at its deposit mix and revisiting its pricing in some instances, albeit selectively, according to Mbo.
He stated that the idea was that growth in interest base should not be faster than the one on the topline.
Non-interest revenue registered a 7 percent growth as key income drivers were up year-on-year, mainly service fees (6 percent up), card commissions (21 percent up), forex (7 percent) and custody (13 percent), among others.
Meanwhile, FNBB CEO, Steven Bogatsu, said the bank believes that in this last lap of its 2025 strategy, has made significant progress, particularly around availing products and services to customers to move customers out of brick and mortar to digital platforms.
“We believe that we have availed solutions to our customers that will enable them to partake in various programmes that are aimed at citizen economic empowerment,” Bogatsu said.
“We believe in the value protection space; we have also done a number of things to enable us to operate within frameworks approved by the board.”
Bogatsu said the bank is also quick to acknowledge operational challenges and promptly address them.
“We have a number of things that we have to put in place in order for our customers to feel that we are assisting them in a manner that is aligned to their expectations,” Bogatsu said.
“Some of the challenges that we still have include KYC, there are a number of initiatives that we have put in place and continue to roll out in order to address the challenges around KYC.”
The bank strives to run a sustainable business, said the CEO, adding that to achieve this, it needs to impact the environment in a manner that is consistent with sustainability.
“Our sustainability journey is divided into about five areas, the first one being human and social development where impact the environment we are operating in through activities aligned to the FNBB Foundation,” he said.
