Absa customers show increased credit appetite
While the economic conditions remain challenging due to setbacks brought by Covid- 19, Absa bank continues to record significant increase of credit appetite from customers with growing number of borrower’s year on year. In its financial year ended June 2021, Absa Bank Botswana recorded nine percent growth on Customer loans and advances to P14.8 billion. Absa Bank Botswana Chief Finance Officer, Cynthia Morapedi said they have seen improved loan conversion rates in Retail and Business Banking ( RBB) segments driven by scheme loans, mortgage sales and value proposition around the Enterprise Supply Chain Development Program.
“We have seen increased momentum in our loan conversion rates especially in RBB where growth was driven by scheme loans, mortgage loans and Enterprise Supply- chain Development ( ESD) loans. This growth is in line with our strategy to continue to lend a hand to our customers who need support during this period and support the initiatives around the citizen economic empowerment and economic diversification.”
She highlighted that under RBB segment, both loans and advances and deposits due to customers grew by 14 percent and 16 percent year- on- year. “Business Banking has remained resilient despite the COVID- 19 challenge and displayed growth in assets, liabilities, revenue contribution and profitability.”
For her part, Absa Bank Managing Director, Keabetswe Pheko- Moshagane said customer deposits have registered pleasing momentum, growing 15 percent in comparison to same period last year, reaching P16 billion. “Although we have seen tightening liquidity in the market our client penetration, acquisition and retention strategy has borne much fruit especially in our CIB segment. We have noted a stable upward trend in our deposit book, a momentum which is expected to last into the rest of the months of 2021.” She highlighted that expected credit losses are still a significant driver in the bank’s current year profitability. “In the first half of 2021, expected credit losses decreased significantly by 74 percent in comparison to the prior period driven mainly by a positive outturn of MEV’s, better than we had anticipated. Our portfolio performance also enjoyed stable and positive performance in the past 6 months and overlaying that is the success of our collection strategies.” The bank’s focus on promoting the digital channels in which it has seen an increase in number of customers on the Business Internet banking platform by two percent. PhekoMoshagane said Business Banking will continue to drive momentum to increase the number of SMEs accessing funding, capacity building, drive the usage of digital channels and supporting client base to grow and contribute positively to the economy.
“Agriculture, CAF and ESD program remain our focus areas to grow the Business banking portfolio.”