FNBB nonperforming loans decline 26%

First National Bank Botswana’s (FNBB) non-performing loans declined by 26% year-on-year from P1.1 billion to P802 million resulting in a gross advance ratio of five percent as at June this year.

Announcing the bank’s results for the year ended June 30, 2022, FNBB CEO Steven Bogatsu said while actively looking for opportunities to support its clients, the bank will continue to be cautious in maintaining the quality of its credit book.

“Deposits remained flat at P22.2 billion following corporate outflows as trading levels normalised and the Botswana greylist status was uplifted. The market experienced liquidity constraints throughout the year and priced up for term deposits,” he said.

FNBB’s retail segment experienced a flattening out of the deposit portfolio due to increased customer spending while the commercial segment experienced growth of 13% aligned to strong customer growth.

On the other hand, its retail advances saw an increase of four percent while Botswana’s retail market as a whole increased five percent. “The bank’s growth was driven largely by term loans where the tenor was selectively extended while maintaining a prudent credit approach,” Bogatsu added.

According to FNBB, its corporate advances experienced excellent growth of 40% year-onyear, with the bank supporting a resurgence of expansion plans. The commercial segment is also reflecting fresh growth, but has seen a moderate overall decline of two percent due to write-offs during the year of some long-outstanding and irrecoverable advances. The combined result of FNBB’s commercial and corporate advances was an increase of 16%.

Further, the bank has achieved a 35% growth in profit before tax of P685 million during the financial year. The normalisation of credit losses as well as a sharp increase in the non-interest revenue base underpinned this. “FNBB focused on partnering with clients as the economic recovery transpired while ensuring the strengthening of the balance sheet through both prudent provisioning as well as maintaining robust capital levels,” he said.

Bogatsu added the bank will continue to invest in its platform, which will not only drive improvement of both the customer and employee experiences. The investment will also enable the bank to remain nimble and responsive to new key technology as it arises within an increasingly dynamic ecosystem.

“Risk management and prudential deployment of resources remain the foundational principles in all investment and development decisions,” he said.