Barclays Bank Botswana, one of the leading banks in the country, this week disclosed that most of the competition it will face in future will emanate from non-bank financial institutions, partly due to consumer trends.
This was disclosed by immediate former Managing Director, Reinette van der Merwe in the company’s latest annual report published this week. The lender, which is publicly listed, has posted sustained profits in recent years, reversing prior years of tumbling profits, but acknowledges that they need to be prepared for the future with non-banks firms which, among others, include micro-lenders and some select telecoms firms which offer mobile money services. Orange Botswana, Mascom Wireless, Botswana Post and Botswana Telecommunications Corporation are all players in the mobile money services worth millions of Pula.
“Looking ahead, it is clear that in future, most of our competition will come from the non-banking sector, a change that is driven by the desire of consumers for greater convenience and the ability of technology to deliver on this. The future of banking, we believe, therefore lies in more partnerships with other businesses,” said Van Der Merwe, declaring ‘we are ready for this’. The bank, which is now led by a local, Keabetswe Pheko-Moshagane, has reiterated it will continue to invest in technological platforms to ensure their online services are continuously ready and reliable.
A unit of ABSA group, the bank will continue to invest in human capital, which remains the cog of the business. Even on the backdrop of tough competition, record low interest rates, fragile economic growth, the bank still managed to stand tall in 2018. The benchmark interest rate is 5 percent. For the past year to December 2018, the bank posted a profit before tax of P 638 million, which represents a 14 percent growth year on year.
The profits were backed by strong growth across most segments of the business. Record low interest rates in the domestic banking market did not deter the bank from growing its loans and customer deposits which reached P11, 8 billion and 11, 9 billion respectively. Barclays, which is expected to change its name to Absa Bank Botswana subject to shareholders’ approval later this month, said it will continue to explore opportunities for growth whilst driving balance sheet efficiency and enabling greater utilisation of its electronic channels.
“The high adoption rate of our channels proves that our strategy is working and we are confident about this approach going forward. The end of our five-year strategy opens a new chapter with more possibilities. Our tried and tested strategy gives us the assurance that we will continue to be a resilient business that is relevant for the future,” stated the annual report. Meanwhile, the bank which its board is chaired by former Bank of Botswana deputy governor, Oduetse Motshidisi will hold Annual General Meeting (AGM) on the 27th of June 2019.
Among other action items for the meeting include the re-election of retiring directors in the person of Motshidisi, Alfred Dube and Kenneth Molosi. Shareholders will also have the chance to approve the name change of the bank to Absa Bank Botswana. At the meeting, shareholders will also have the opportunity to approve directors’ remuneration as well as re-appointing KPMG as auditors for the ensuing year.
For a country that has more cattle than people, where a meal without beef is regarded as incomplete, a meat less burger could be a farfetched idea of cooking. Infinite Foods thinks not. Last week Thursday, they just did that, launched…guess what, a meatless burger. The burger is a new plant-based protein offering. Also launched on the day was Nature & Moi Cheese.
The event was held at the Caravela Restaurant, a Portuguese flavoured eatery in Extension 4, in the periphery of the African mall shopping complex. The big launch was attended by the media, and notable faces in the banking and hospitality industry, including the outgoing M.D of Baclays Bank Botswana, Reinette van der Merwe, as well as the General Manager of Cresta Lodge, Greg Soutter, among many others.
The moment of truth came for the attendants to sample and bite this burger. When this reporter heard about the meatless burger, her initial reaction was of curiosity. Will the bite live to the expectation of a meat burger as it is known to be? The Patti was something else, could not tickle the beef taste buds. Needed some seasoning, perhaps. If it was an audition and this reporter was the judge, the burger would probably have frowned at the verdict. The launch comes on the back drop of the signing of a contract between Go Fresh and Infinite Foods.
The deal will see Infinite Foods distributing the leading plant-based protein products in Botswana. It is part of the Botswana-based fresh produce brand expansion plans, to include plant-based protein products as part of its offerings. A press release explains that the brains behind Go Fresh is none other than leading entrepreneur Michelle Adelman. The company, says the release, has been delivering high quality fresh produce to consumers in Gaborone and Maun since 2014 and has won numerous awards for its technology-abled farming and approach to engaging Batswana youth leaders to run the company. It further says that The Beyond Burger is the flagship product of leading US plant-based meat company Beyond Meat.
The company, explains the release is at the forefront of the growing global movement towards a more sustainable approach to meat and protein. “Livestock agriculture has a detrimental impact on the environment, and it has become imperative that sustainable, less detrimental meat and protein alternatives be sourced. Companies like Beyond Meat are using cutting-edge science to change the way we think about and define meat. While the positive impact of plant-based meat on the planet and to human health is massive, the most revolutionary thing about The Beyond Burger® is that it looks, cooks, and tastes like beef. It is made entirely of plants and has no added hormones, antibiotics, GMOs, soy or gluten,” says the release.
According to the Director of Infinite Foods, Phenyo Moroka, as much as Batswana love their beef, we know that too much meat has been linked to high cholesterol, cancer and heart disease. He also says that it is high time we find ways to eat less meat.
“These are the words most of us don’t want to hear but imagine if you could enjoy all the things you love about eating meat, get all the protein, nutrients and delicious taste, but have no health worries linked to eating too much meat? That’s what has consumers going crazy for The Beyond Burger. It really is The Future of Protein,” he says.
A Beyond Burger patty has 20g of protein, more than a beef burger, with less saturated fat and no cholesterol. It also uses 99% less water than a traditional 113-gram beef burger, 93% less land, and produces 90% fewer greenhouse gases, according to a joint study by Beyond Meat and a major US university. Infinite Foods will initially launch The Beyond Burger in restaurants and foodservice outlets, adding to Beyond Meat’s current distribution in more than 12,000 restaurants including Carl’s Jr., TGI Fridays, BurgerFi, Bareburger and A&W Canada.
Nine months after Barclays launched a plan to build capacity for SMEs, the bank upbeat about the scheme - Enterprise Supply Chain Development (ESD). “The unit is making steady progress and has successfully recruited four companies to the programme me that seek to grow SME’s by providing financing,” said Reinette van der Merwe, Barclays Managing Director.
She said the bank has also started construction of an ESD centre already nearing completion, where challenges faced by Small to Medium Enterprises (SMEs) will be addressed. Van der Merwe believes SME sector is an important driver of economic growth and employment creation. Through the programme, Barclays accords an opportunity to companies to recommend some of the SMEs that deserve financial assistance in the form of loans and also get mentoring and training on record keeping.
This week Barclays hosted 20 young female farmers to share skills, knowledge and deepen relationships with the agricultural community. “We believe that effective capacity building programmes and a vibrant extensive service are important interventions that can turnaround the agriculture sector and output and also contribute to both food security and GDP,” said van der Merwe.
The MD said agriculture is an important and essential sector, hence the bank’s support of various strategic initiatives across the sector including knowledge and skills transfer, exchange and training. Her sentiments were shared by Andre Potgieter, Barclays Head of Business Banking highlighting that more than half of Africa’s population is made up of young people. “As such, it’s very important for us to be working with young farmers, who are vital to securing Botswana’s food security,” said Potgieter.
Potgieter said agribusiness continues to be a very important sector. “We are keen to support young farmers as well as other strategic initiatives,” said Potgieter. Barclays MD has recently announced that the bank is motivated by delivering mutual benefit to shareholders, customers and communities.“Bringing possibilities to life for us means helping individuals’ customers, our colleagues, small business, corporate, economies and society at large to grow,” said van der Merwe.
Barclays Bank Botswana is expecting interim consolidated profits to June 2016 to be higher than the previous period. The latest notice on improved results comes amid tough trading environment that domestic banks have been subjected to such as lower rates and sluggish economic growth.
The company which is publicly listed has however not disclosed to its shareholders how much profit to expect, save to tell shareholders and the regulator, that the results ‘will be higher than that reported for the period ended June 2015’.
The lender which is under the care of South African-born Reinette van der Merwe hinted on the profits a day after the Monetary Policy Committee (MPC) cut key lending rate from 6 percent to 5,5 percent. Bank of Botswana said a rate slash is necessary to inspire growth in the domestic market.
It is not clear what could have contributed to the rise in Barclays bank’s profits for the period under review. However, writing in the bank’s annual report for 2015, Merwe acknowledged that the sector has been under pressure in the past two years, and they are not immune to challenges which include tight regulatory changes. However, Merwe was upbeat about the year ahead(2016), saying they expect strong revenue from the retail sector. The bank’s digital platforms will also come in handy for the bank. In the last couple of months, the bank launched various digital platforms which allow customers to do banking outside banking halls using their mobile gadgets.
Barclays has also been rigorously advertising their business banking services while some of its peers developed cold feet regarding lending to capital intensive projects in the face of market turbulences. Speaking to BG Business on Wednesday, Head of Research at Motswedi Securities, Garry Juma said the bank’s restricting exercise is starting to pay off. Since Merwe was appointed to head the bank three years ago, the lender undertook a restructuring exercise both in terms of human capital and delivery channel platforms.“The bank is also coming from a lower base,” said the analyst referring to the bank’s half year results to June 2015.
During the period, the bank’s profit was P86, 9 million, compared to P123, 6million. The company has also managed to shrug off negative perception which has made the round ever since Barclays plc announced it was pulling out of Africa operations. In the just-ended period, the bank clinched a $100 million deal to fund BCL copper mine. The loan to the struggling miner has been backed by government in case the mine fails to pay up.
It is some of these corporate deals that will also keep Barclays at the top in the coming months, said Juma. Last month, the bank signed a $125 million credit guarantee scheme with Overseas Private Investment Corporation (OPIC). Under the historic arrangement, the United States government will use 75 percent of the credit risk to fund the country’s diamond beneficiation initiatives. The funding could not have come at a better time for the country’s downstream diamond cutting business, which is struggling to receive rough diamonds to process on the backdrop of reduced diamond demand globally.
Last month, minister responsible for minerals, Kitso Mokaila told lawmakers that the industry dropped by nearly half from the US$936.36 million recorded in 2014 to US$502.16 million in 2015.Two out of 21 companies that were operating in Gaborone at the beginning of 2015 had closed shop by year-end due to viability problems, stated Mokaila. “Therefore, there are only 19 operational diamonds cutting and polishing companies operating in Botswana at the moment and they employ around 2,000 people,” said Mokaila.
Barclays Bank which has upped the ante on marketing and promotional activities for its products and services has cautioned its shareholders when dealing with its securities until the results are formally released.