Absa Bank Botswana to list more linked units On BSE
ABSA Bank of Botswana Limited listed on the Botswana Stock Exchange ( BSE) under the Banking sector say they have applied to the BSE to approve the listing of the 13,767,297 new linked units.
It is anticipated the new linked units will be listed on the BSE on November 22, 2022. This means that the number of issued linked units will increase from 460,336,206 to 474,103,503.
The Bank is primarily involved in the provision of commercial retail and wholesale banking and auxiliary services. Absa Insurance Services Proprietary Limited is an insurance agent which earns fees from referral of life and non- life insurance products. Absa Securities Botswana Proprietary Limited is a securities business that provides mergers and acquisition and other investment banking advisory services
The company said this in response to the offer by the company of scrip in lieu of 100 percent of the distribution ( of dividend and interest) on linked units, declared in respect of the year ending June 30, 2022. The offer closed on November 4, 2022. A scrip dividend is when a company instead of automatically giving their shareholders a cash dividend, gives them the choice of either receiving a cash dividend or the equivalent in additional shares of the company.
For example, let’s say company X’s share price is $ 10.00. The company pays $ 3.00 once per year as a dividend. You own 100 shares. If company X has a scrip dividend declared, then you can choose to receive either US$ 300.00 in cash, or 30 additional shares of company X.
If you elect to receive cash, you can still use the money to buy additional shares in the company, but if you elect to receive additional shares, the scrip dividend just reinvests the dividend for you. According to a statement released on November 7, 2022, unit holders holding 133,167,204 linked units of ABSA Bank of Botswana, representing 28.93 percent of the linked units in issue elected to receive linked units ( in lieu of cash) of 100 percent of the distribution
“Unitholders holding 132,717,953 linked units, representing 28.83 percent of linked unit in issue elected to receive linked units ( in lieu of cash) of 50 percent of the distribution ( of dividend and interest).”
“Unitholders holding 194,451,049 linked units representing 42.24 percent of the issued linked units did not elect to receive linked units ( scrip) in lieu of 100 percent of the distribution payable to them, and will receive the cash distribution net of withholding tax, where applicable,” read the statement. The firm further added that payment of the distribution will be made on or before November 11, 2022.
The statement stressed that after the calculation of withholding tax payable on the distribution due to each such unitholder which is liable to such tax 13,767,297 new linked units will be issued. Absa Bank Botswana Limited condensed consolidated interim financial statements for the period ended June 30, 2022, highlighted that profit before tax grew by 36 percent year on year, signalling a positive recovery from the June 2021 position. These condensed interim financial statements for the six months ended 30 June 2022 comprise the company and its wholly owned subsidiaries Absa Insurance Services Proprietary Limited and Absa Securities Botswana Proprietary Limited.
This performance was achieved by positive trajectory on all material lines of statement of comprehensive income with total revenue improving 11 percent year on year according to the bank. This is also consistent with recovery in business momentum.
Pre- provision profit also grew year- on- year by 21 percent leading to annualised Return on Equity ( ROE) growing to 24 percent as at June 30, 2022. According to Absa Bank, this performance was mainly driven by positive performance of the net interest income and non- funded income lines. Net interest income realised strong performance showing an 8 percent improvement year on year as a result of positive balance sheet momentum realised on the RBB and CIB sectors, despite the interest expense increasing by 30 percent from prior period.