Stanbic Botswana, the country’s largest unlisted bank is bullish on the year ahead despite growing concerns the economy will not recover at a much faster pace as expected.
The company’s Chairman, Craig Granville, Chief Executive, Leina Gabaraane and Chief Financial Officer, Sam Minta highlighted this in a company annual report published recently. The trio’s confidence it seems, is backed by a strong showing by the bank for the past financial year in which they grew bottom line by 48percent to close at P195million, beating some of the listed banks in the country.
“I remain confident that the executive team, the entire staff and the investments made in critical operational areas will support the delivery of another exceptional performance in 2017,” said Cranville. Stanbic, which is subsidiary of Standard Bank, Africa’s largest bank by assets, has over the years remained safe and sound despite challenges within the banking industry. The banking industry’s size is estimated at half of the Gross Domestic Product (GDP) of the economy.
Stanbic’s sustained profitability has attracted opinions from some commentators urging it to list at the domestic bourse. In an exclusive interview with BG Business in Johannesburg, South Africa, co-Chief Executive Ben Kruger said the bank cannot list because shareholders cannot bear the cost associated with a listing process. Kruger was speaking in 2013.
It was not immediately clear if the position of the bank on listing has changed at press time. The man who controls the company’s operations on a daily basis, Gabaraane is also upbeat that ‘the strong foundations of 2016 will help the Bank navigate the likely strong headwinds in 2017.
Some of the headwinds that Gabaraane is referring to include lower bank rate regime(the bank rate is currently at a two-decades low of 5,5percent), the struggling domestic economy, limited disposable income, among others. Last year the bank launched the country’s first mobile branch which is a hit with customers especially outside cities and major villages. The 25-year old bank also launched ‘Road to Excellence’ strategy last year. It focuses on improving customer experience, building stronger teams and building the balance sheet. The purse holder Minta, is also optimistic that the bank will survive the storm which has affected its peers.
“Notwithstanding the current market conditions, there is a growing confidence across Stanbic Bank in our ability to deliver strong results against strong macro-economic performance,” wrote Minta, a former CFO at Stanbic Zambia. In the past year, the bank bought a P213million core banking software from its parent company, Standard Bank.
“The central bank granted the bank (Stanbic) to phase the acquisition cost to equity over 5 years,” stated Minta. The personal and business banking unit is also expected to return to profitability this year. It has been impacted by rates cut. For shareholders, the past year was unforgettable. “For the first time in three years, dividends of P150million was declared and paid in June,” stated Minta.
Locally, Stanbic is among the top four banks in the country by any measure.