Letshego forecasts mixed fortunes for 2021
... As group profits before tax pick beyond P1 bn
Financial services company Letshego has predicted contrasting recoveries for economies from the COVID- 19 pandemic. The pan African business said the future of business environment remains uncertain globally and across the continent.
“Due to the disparate recoveries, we expect subdued business recovery throughout 2021, but activity should pick up in 2022,” said Group Chairman, Enos Banda, adding that industries sectors, segments and countries are expected to recover at different rates. The predictions come on the backdrop of Letshego posting strong robust financial performance for the financial year ended
December 2020.
Despite the challenging economic environment, Letshego delivered profit before tax in excess of P1 billion, bridging the net year on year decrease from 20 percent in the first half to nine percent in the second half. The group chairman said through fast tracking the digitalisation of systems and channels, customer access was maintained and enhanced during the financial period under review.
The strategy improved the group’s business performance in the second half of the year compared to the first half. Last year, Letshego initiated digital transformation with increased access to core business offerings via WhatsApp and Webforms. “This was further supported by our call centre and ‘ Digital Eagles’ ( front line employees) educating customers on how to transition from
traditional channels to digital,” said Banda. Statistics indicate that the company’s digital adoption increased from two percent in February 2020 to 69 percent by year end. In addition, in the last quarter of 2020, Letshego processed more loan transactions on digital and alternative channels than traditional channels. Though uncertainties hang over economies, Letshego this year intends to focus on building out differentiating products and end- to- end digital capabilities. “As a result, it is our expectation that key performance indicators will shift over the period. Our target is to achieve above 70 percent digital adoption levels, within a wider product mix. We target a return on equity ( ROE) of 15- 16 percent, keeping us on track to meet our target ROE above 20 percent by 2025, in line with our five- year strategic plan,” said Banda.