Stanchart profits down marginally
Standard Chartered Bank Botswana has recorded 47 per cent increase in profit before tax to P102 million despite tough trading conditions caused by the Covid 19 pandemic during 2020.
However, the lender which is also listed at Botswana Stock Exchange said profit after tax declined marginally by nine per cent to P49, 7 million compared to P54, 8 million recorded in the previous year. Standard Chartered which is the oldest bank in the country had a strong comeback just before COVID 19 hit home. Commenting on the published results for the year ended December 2020, Standard Chartered Managing Director, Mpho Masupe said the business was not spared from the negative impacts of COVID- 19 which set in at the beginning of the second quarter last year. He said the national lockdown which ran from April into early May of 2020 resulted in a substantial reduction in transaction volumes thereby impacting non- funded income. “This was also compounded by a temporary 25 percent fee discount we offered to clients on our digital platforms partly in a bid to drive movement of people away from our physical branches, he disclosed.
The CEO explained that the bank’s margins were also impacted from two perspectives being the sales activity which was severely curtailed during the lockdown period and the successive policy rate cuts by the Monetary Policy Committee of the Central Bank in a bid to assist in promoting the much- desired economic activity. The rate cuts accumulated to a full 100 bps thereby affecting our gross interest earnings significantly. He said despite the severely challenging business environment, decisive steps were taken by management to defend business gains from the last three years. “Appropriate liability management strategies were deployed, resulting in a double- digit reduction in interest expense, leading to an overall increase in Net interest income.” However, the banks Financial Markets business fully exploited the volatility that was presented across all major currencies, resulting in an overall growth in trading income. The banks underlying costs were broadly flat with a one percent increase over prior levels. “The 1percent growth is attributable, mainly, to expen
ditures incurred in protecting our staff and clients against COVID- 19, as well as contributing to efforts by Government and communities in responding to the same,” said Masupe. Furthermore Masupe said they expect economic recovery as COVID- 19 vaccines are available and there are early signs of recovery in some sectors. He said the bank will lean more on enhancing client experience through improved internal productivity, expanded product offering and a faster pace in delivering its digital agenda. “The immediate future does look uncertain, but our focus on delivering best possible risk adjusted returns to investors remains, while we will not compromise on quality of service to our clients. We will continue to prioritise health and safety for our staff and clients in the face of the COVID- 19 pandemic, and work with our communities in mitigating the impact of the scourge.”