ABSA RECORDS IMPROVED LOANS, DEPOSITS
Absa Bank Botswana has recorded a growth on customer loans and deposits for the six months period ending June 2020 despite the impact of Covid-19. According to the listed bank, customer loans grew by seven percent to P13.6 billion from P12.8 billion while Customer deposits increased by eight percent to P14 billion from P13 billion driven by positive growth across our business segments. Managing Director Keabetswe Pheko-Moshagane said overall, the bank registered a growth on customer loans and deposits due to stronger balance sheet momentum. “The growth in loans was realized across all business segments as we continued
to focus on client penetration and acquisition to drive up our volumes. Our balance sheet position remains solid at a total financial position of P18.8 billion with strong liquidity and capital adequacy levels,” she announced.
The bank’s regulatory capital position stood at P2.7 billion representing a capital adequacy ratio of 20 percent against the regulatory limit of 12.5 percent and liquid assets ratio at 16 percent, well above the regulatory minimum of 10 percent. Presenting the results on Tuesday, Pheko-Moshagane said the bank’s total corporate and Investment Banking income remained subdued compared to the same period last year mainly due to lowered business activity emanating from the lockdown imposed by the government to combat the COVID-19 pandemic.
However, she explained that the outbreak of COVID-19 has had a significant impact on the economy, mainly on the socio-economic fiber of the bank’s communities. “This has consequently impacted the ease of doing business, resulting in a down turn of our fee income. To counter the effects of COVID-19 on the livelihood of our customers, the Bank extended a helping hand in the form of repayment holidays, loan restructures and other forbearance programs. The impact of which was a significant increase in impairments due to changes in risk classification of our portfolios. The increase in ECL and margin compression resulted in subdued performance,” she said.
The bank’s net interest income increased by four percent due to an uptick in balance sheet momentum driven mainly by retail banking which saw growth in scheme loans offering.