Standard Bank prof­its up 13 per­cent

Lesotho Times - - Business - Staff Writer

STANDARD Le­sotho Bank (SLB) reg­is­tered a 13 per­cent profit growth of M387 mil­lion in 2016 com­pared to the same pe­riod in the prior year de­spite the tough eco­nomic en­vi­ron­ment.

An­nounc­ing the bank’s fi­nan­cial re­sults for the year end­ing De­cem­ber 2016 this week, SLB Chief Ex­ec­u­tive Mpho Vum­bukani said they had man­aged to reg­is­ter a profit in an ad­verse eco­nomic en­vi­ron­ment char­ac­terised by low global de­mand – which neg­a­tively af­fected the ex­port sec­tor – and slow growth in South Africa.

“Profit after tax was M387 mil­lion, which is a 13 per­cent in­crease on the prior year. To­tal in­come grew by 9 per­cent to M986 mil­lion whilst to­tal op­er­at­ing costs were up 7 per­cent trans­lat­ing into 2 per­cent pos­i­tive jaws ra­tio, i.e. our to­tal in­come grew at a faster pace than op­er­at­ing costs with a mar­gin of 2 per­cent,” he said.

“How­ever, we ex­pe­ri­enced huge drop of 17 per­cent (M1.4 bil­lion) in our fi­nan­cial po­si­tion as at end 2016 com­pared to 2015 largely at­tributable to with­drawals of the de­posits by some of our top cus­tomers dur­ing the sec­ond half of 2016.”

Mr Vum­bukani said the bank con­tin­ued lend­ing to busi­nesses and in­di­vid­ual cus­tomers.

“. . . how­ever the re­pay­ments off­set the new loans book to an ex­tent that gross loans and ad­vances to cus­tomers de­clined by 3 per­cent (M120m), fur­ther ev­i­denc­ing the tough eco­nomic en­vi­ron­ment that im­pacted con­sumer spend­ing.

“As in­di­cated, this good per­for­mance came amid a huge eco­nomic down­turn, but we were able to con­tain our costs and im­prove ef­fi­cien­cies to main­tain our op­er­at­ing costs. We were also able to con­tain fee in­creases within the in­fla­tion rate of 6 per­cent, and in some in­stances, kept fees flat in 2016.”

SLB, he said, also im­proved its bank­ing chan­nels such as ATMS, with some now hav­ing touch screen func­tion­al­ity and cash de- posit ca­pa­bil­i­ties.

“Our POS ter­mi­nals have in­creased from 535 to 568 in 2016, and also made im­prove­ments to our In­ter­net bank­ing plat­forms which im­proved both ser­vice and our of­fer­ing to as­sist in gen­er­at­ing good prof­its.

“I must men­tion that we are among the top three big­gest con­trib­u­tors to taxes in Le­sotho and we also in­vest a sub­stan­tial part of the prof­its an­nu­ally to char­i­ta­ble causes through­out the coun­try.”

Mr Vum­bukani also touched on the re­cent launch of SLB’S Core Bank­ing Sys­tem, say­ing cus­tomers should ex­pect a vast ar­ray of bank­ing in­no­va­tions.

The new sys­tem was un­veiled last month and uses Fi­na­cle - a bank­ing so­lu­tion de­vel­oped by an In­dian cor­po­ra­tion called In­fosys.

Mr Vum­bukani said the sys­tem was glob­ally used by over 400 banks, adding that Le­sotho was the 10th coun­try to adopt it among the 17 in the Standard Bank group. He also pointed out that the last sys­tem up­grade was done 19 years ago.

“This core bank­ing sys­tem up­grade in­volved the im­prove­ment of the back-end pro­cess­ing sys­tems that han­dle all our bank­ing op­er­a­tions in­clud­ing teller ser­vices, sales, loan orig­i­na­tion, pay­ment sys­tems, ATMS, and elec­tronic ser­vices to men­tion just a few,” he said.

“There­fore, it is clear that by this up­grade, we have im­proved the nerve cen­tre of all our op­er­a­tions, which go a long way in im­prov­ing the ser­vices that the bank of­fers.”

While the sys­tem up­grade ex­pe­ri­enced some teething prob­lems, Mr Vum­bukani said they had been largely dealt with over the last few days.

“We will now be­gin the Dig­i­tal Jour­ney as we in­tro­duce some of the new prod­ucts and ser­vices that our cus­tomers have asked for through some of the en­gage­ments we had with them in 2016.

“One of them was called ‘The Voice of the Cus­tomer’, where we needed to de­fine their voice and hear what they re­ally need from us as their partner.”

Some of the prod­ucts avail­able un­der the Core Bank­ing Sys­tem in­clude the EMV Chipped Debit Card – a Euro­pay, MasterCard and Visa-en­abled debit card used for ATM and point of sale ter­mi­nals.

“With the use of both mag­netic strip and chip, I am happy to an­nounce that our cards will now be fully com­pli­ant with in­ter­na­tional stan­dards and have high tech­nol­ogy se­cu­rity that is go­ing to solve our long stand­ing prob­lems when it comes to in­ter­na­tional trans­actabil­ity and in­stances of card cloning that was a prob­lem. With the new EMV cards, our cus­tomers will use their cards at more than 40 mil­lion re­tail­ers in more than 210 coun­tries across the globe,” Mr Vum­bukani said.

En­ter­prise On­line is another in­ter­net bank­ing prod­uct tar­geted at small to medium-sized busi­nesses.

“You will re­call that we cur­rently have per­sonal in­ter­net bank­ing and Busi­ness On­line, both of which cater for pri­vate in­di­vid­u­als and large cor­po­rates, and we did not have a mid­dle op­tion for grow­ing busi­nesses.

“En­ter­prise On­line is in­tended to bridge that gap and of­fer busi­nesses the con­ve­nience of do­ing busi­ness on­line so that our busi­nesses do not use their per­sonal pro­files to do their busi­ness bank­ing.”

He also men­tioned Smart App, an ap­pli­ca­tion that en­ables SLB cus­tomers to trans­act on their mo­bile phones.

“The Standard Le­sotho Bank Smart App will also en­able cus­tomers to cal­cu­late if they can af­ford to get a home loan, re­pay­ments for the home loan as well as cal­cu­late how much fi­nance they can get to pur­chase a ve­hi­cle as­set,” the SLB boss ex­plained.

SLB Chief Ex­ec­u­tive Mpho Vum­bukani

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