- Bank prioritises agency banking and partnerhips
- Plans to reduce cost-to-income ratio to 60%
- PBT registers 229% growth to P253m
- Share price increases by 200%
Optimal distribution model through increased agency banking and developing partnerships have emerged as key parts of new strategic priorities to guide Standard Chartered Bank Botswana (SCBB) for the next three years.
This came to light when the CEO of StanChart Botswana, Mpho Masupe, presented the bank’s full-year financial results in Gaborone this week.
In addition, the bank will prioritise brand visibility as well as grow employee experience by 18 percent. Other priorities for the period 2023 to 2025 include Thinking Client and improving the turnaround time of personal loans. “This is to ensure that clients will have money when they need it,” Masupe said.
StanChart also plans to grow return on equity by 25 percent from the current 16 percent, and to bring down the cost-to-income ratio to 60 percent from 67 percent. For the period under review, StanChart delivered double-digit net revenue growth of 22 percent year-on-year, which was underpinned by positive Corporate Commercial and Institutional Banking (CCIB) and a favourable interest rate environment.
The bank says its core business areas continued to deliver strong performances, with CCIB registering 69 percent revenue growth on the back of strong underlying business momentum and positive progress made against its strategic pillars. According to the bank’s Head of CCIB, Asuquo Nkopsong, StanChart had planned to grow trade corridors, specifically the China and Australian corridors. During the period under review, StanChart launched the Chinese Renminbi. Introduction of Chinese Renminbi, with StanChart the first bank to offer this currency for onshore trading, is reported to be yielding results.
The segment’s bottom-line profit grew 11 times to end the year at P154 million compared to the prior year of P14 million. “The Australian corridor is also important to Botswana in that we have Australian mining companies undertaking activities here,” Nkopsong pointed out. The Consumer, Private & Business Banking (CPBB) segment grew revenue by 8 percent, which the bank says is largely due to the higher policy rates that characterised 2022.
The bank says the digital business agenda remains critical to transforming CPBB’s growth and the transformation is gaining pace with digital adoption improving by 6 percent year-on-year to 76 percent. Following the launch of Agency Banking last year, the business is also said to be on a path to scale the personal segment through strategic partnerships. For the period under review, StanChart’s operating expenses declined by 8 percent, reflecting operational efficiencies with the cost-to-income ratio improving from 89 percent to 67 percent year-on-year.
StanChart believes expense efficiency is core to enabling it to create positive operating leverage whilst creating the capacity to continue investing in strategic initiatives. The bank also says its credit quality remains strong and well-positioned to support economic growth despite continued economic uncertainty. Overall, StanChart delivered what it describes as a strong performance with an exponential 229 percent growth in its profit before tax to P253 million, from P77 million in the prior year.
The robust implementation of the digitisation strategy is said to have resulted in continued sustainable gains, with operating income growing 22 percent and the cost-to-income ratio down from 89 percent to 67 percent for the year. Significantly, the bank notes that this confidence in the delivery of its strategy is reflected in shareholder value, with an increase in share price by 91 thebe to 287 thebe in the year when the bank commemorates 125 years of doing business in Botswana.
