First National Bank Botswana (FNBB) remains optimistic about its performance in 2018 considering the positive signs of economic recovery in the country.
FNBB Chief Executive Officer, Steven Bogatsu said they expect the economy to start showing positive signs of recovery in the short to medium term as the indications are that the diamond industry is recovering and the tourism and agricultural sectors are performing well.
“The improvement to business credit extension is further evidence that the economy is on the road to recovery and we believe that we can confidently look forward to a better 2018,” said Bogatsu.He said they are encouraged that the bank of Botswana perception index indicates that the business community is buoyant about the future prospects for the country.In the company’s 2017 annual report, Bogatsu highlighted that business confidence showed an improvement in the first half of 2017 and there has been some recovery in the commodity space. However there was no growth in diamond production, but diamond sales, which are mostly exports, were significantly higher than in the previous year.
Bogatsu said it has been a challenging year for FNBB and the tough trading conditions were exacerbated by the closure of major mines and associated business failures which placed a large number of consumers under considerable pressure and negatively impacted their disposable incomes. “Consequence to the bank was a sharp increase in non-performing loans, particularly in the retail consumer segment which rose to unprecedented levels,” said Bogatsu.The bank’s overall performance was also affected by the downstream businesses in the transport, hospitality, accommodation and associated service industries that supported the mines. The overall performance was relatively flat with profit before tax increasing by three percent to P680.3 million and profit after tax marginally down on the previous year at P500. 5 million. The balance sheet grew by eight percent with four percent increase in net advances.