Stanchart PBT returns to 2016 levels

Significantly, all segments contributed to the collective gains of the business which enabled a 47 percent increase in Profit before Tax (PBT) to P102 million in 2020.

Stanchart PBT returns to 2016 levels
Mpho Masupe, Chief Executive Officer at Standard Chartered Botswana

Notwithstanding the significant negative impact of Covid-19 on business performance, Standard Chartered Bank has demonstrated resilience and continued sustainable momentum that has been a feature of the business since the launch of a refreshed strategy in 2018. Significantly, all segments contributed to the collective gains of the business which enabled a 47 percent increase in Profit before Tax (PBT) to P102 million in  2020. This saw the business return to a PBT above the P100 million mark for the first time since 2016.

Across operating indicators, the combination of the continued pursuit of management’s strategy and a measured approach to the Covid-19 pandemic showed further positives for the business.

Mpho Masupe, Chief Executive Officer at Standard Chartered Botswana says “despite the uncertainty, our strategy continues to deliver the results that we were confident it would. It has taken great commitment by our team, Management, and the trust shown in us by our clients to glean these sustainable results”. Moreover, Masupe says the momentum the bank have created and are harnessing has allowed them to continue its digital enhancements. “Our SC Mobile app continues to entrench its foothold in the market, reaching further into the country and demographics that are new to the banking sector. Coupled to this, our roll out of Express Banking Centres is gaining momentum and supporting the efficacy of our digital platforms.”

Operating income grew 4 percent, while loans and advances to clients grew 2 percent to partially offset pressure on non-funded income emanating from stunted transacting volumes, while interest expenses fell by 14 percent. Underlying operating expenses remained relatively flat year-on-year with a 1 percent rise, this despite the introduction of large-scale health measures to protect staff and clients against the pandemic and contributions totaling P5.1 million expended to the national fight against Covid-19. A once-off provision increased overall operating expenses by 6 percent.

Following the strong start to the year, the negative impact of Covid-19 began in earnest at the beginning of the second quarter. The bank says margin income was significantly impacted by a substantial reduction in sales during the national lockdown period and were further impacted by a cumulative 100-bps reduction of the Policy Rate by the Monetary Policy Committee of the Central Bank as an intervention to assist in promoting economic activity.

Understanding the pressures on clients and their businesses, the Bank extended several initiatives to assist in easing the strain including temporary discounted fees on its digital platforms, and repayment holidays to the personal and corporate segments. Inevitably, underlying credit provisions went up 28 percent, reflecting a credit market impacted by Covid-19.

“Our market-leading Straight2Bank platform for corporates has stretched its market adoption even further and with the launch of Straight2Bank Next Gen, we foresee even greater penetration in the market,” Masupe says.