- Profit before tax P241 million; up 239%
- Return on Equity (ROE) improved to 34%
- Capital Adequacy Ratio (CAR) at 17.1% against regulatory requirement of 12.5%
- Cost to Income Ratio 60% down from 75%
- Share Price Up 185 thebe to P4.13
Standard Chartered Bank Botswana announced its half year financial results for the period ended 30th June 2023 with optimism for the Bank’s future.
The Bank unveiled an applaudable 239 percent increase in profit before tax to P241 million. As the only international bank in Botswana, Standard Chartered Bank has navigated a testing global economic climate, characterised largely by recessionary conditions in major markets and a local economy that fortunately, expanded by 5.4 percent in the beginning of the year and has seen decreased headline inflation to 4.6 percent by June 2023.
Speaking at the results presentation, Standard Chartered Bank Botswana Chief Executive Officer, Mpho Masupe spoke about how the Bank’s performance reinforces their strategic intent. “The Bank’s half year income closed at P523 million, up 30 percent from the previous year, revealing a solid performance on margin income which recorded a decent year-on-year growth of 57 percent. Our operating expenses were contained to an increase of 4 percent due to increase in staff costs, which is reflective of the Bank’s strategy to invest in sustainable human capital. Cost to income ratio improved from 75 percent to 60 percent. The Bank’s expense efficiency is core to enabling a positive operating leverage, whilst creating capacity to continue investing into strategic initiatives. Our segments growth in H1 2023 is evidence of how we are evolving to meet our client’s needs and our target to maintain double digit Return on Tangible Equity.” stated Masupe.
The Consumer, Private & Business Banking segment (CPBB) delivered solid financial results, recording revenue growth of 17 percent to P329 million. In an effort to improve and deliver on a client experience agenda, CPBB continues to digitise by migrating clients to our self-service digital platforms and reporting a digital adoption rate of 79 percent in June 2023, from 70 percent in June 2022.
Standard Chartered has leveraged off its global network and expertise, to drive the Bank’s NonFunded Income (NFI) agenda to the Affluent and Business Banking segments. The relaunch of the Affluent Segment in the first half of the year has allowed the Bank to refresh the segment’s value proposition to clients, by diversifying the Affluent portfolio and expanding its wealth management advisory capacity. The launch of offshore mutual funds presents clients the opportunity of investing in unit trust funds offered by Ninety-One, Allianz and Alliance Bernstein. Clients can also invest in a currency of their choice, being USD, Euro, or GBP.
In addition, our product suite also includes a global list of more than 50 offshore corporate bonds across Africa, Asia, America, Australia, and the Middle East, which our local clients have access to. The Commercial, Corporate and Institutional Banking (CCIB) segment continues to report strong performance with total income growing 60 percent year-on-year and bottom-line profit before tax leaping 300 percent over the prior year.
This demonstrates that the segment strategy to focus on areas with comparative advantage is yielding positive results. These niche areas are Financial Institutions, Public Sector and Global subsidiaries. CCIB remains the market leader with our online banking platform Staright2Bank which we continue to invest in. During the period, the processing of bank guarantees and invoice financing facilities were successfully migrated onto the platform, further providing efficiency and superior banking service to our corporate clients. The Bank’s 2023 to 2025 strategic actions revolve around optimising our distribution model through partnerships that will also ensure increased brand visibility. In March 2023, the Agent Banking model, Eazy Pula launched, and has now grown to 44 locations across the country.
The Bank is on target to have 100 active Eazy Pula sites by the end of the year to increase access to banking in remote and underserved communities. “Our key performance indicators are trending in the right direction and the market believes in our approach. Within the first half of the year, we were the best performing stock on the Botswana Stock Exchange, recording a year-to-date growth of 43.9% by June 2023. The Bank’s share price was trading at P4.13 as at 30 June 2023 from an opening price of P2.87 at the beginning of the year. Our 126year heritage continues to grow, along with the value we bring to Botswana and Batswana, as we live out our promise to be – Here for good,” said Masupe as he enthusiastically spoke about the Bank’s future in Botswana.