Barclays Bank of Botswana Limited 2018 annual report

We have extracted below the Chairman’s Statement from the 2019 annual report of  Barclays Bank Botswana Limited (BARC.bw), listed on Botswana Stock Exchange

Dear Shareholder,

Reviewing the 2018 results of Barclays Bank of Botswana Limited gave me a sense of deep satisfaction and pride. In an environment characterised by economic uncertainty and increasingly stiff competition, as well as the significant changes taking place within our organisation, our Bank performed admirably.

We are also encouraged by the resilience of our people and systems in the face of these challenges; the confidence of our major shareholder in our abilities; and the generally positive market response to the change on the name of our parent company, now renamed Absa Group Limited (Absa Group). The upward trajectory of our financial performance augur well for the realisation of our business strategy – to create a future-fit and people-centric bank that will deliver sustainable value to all our stakeholders, while having a lasting and beneficial impact on the communities in which we operate and our country as a whole.

Economic overview

Botswana achieved impressive real GDP growth in 2018 of 4.5%, a satisfactory and welcome improvement on 2017’s 2.9%. This rise was mainly supported by the recovery in the mining sector, which saw its growth turn around from 2017’s contraction of -11.1% to 7.4% in 2018. In addition, the relocation of the Diamond Trading Company from London to Gaborone continues to have a positive impact on the trade, hospitalities and restaurants sectors, including the wholesale sub-sector – an important market for the Bank.

Looking ahead, we expect that significant public and private sector investment into infrastructure and the relatively expansionary fiscal policy will drive growth in 2019 and beyond. However, there are downside risks to these favourable forecasts. These include the on-going global trade uncertainties that have potential to negatively impact diamond sales and the severe El niño weather patterns that are likely to affect agricultural production.

Governance

The Bank is unconditionally committed to the maintenance of sound governance principles and practice. In line with this, we appointed two additional Independent Non-Executive Directors, Kgotlayarona Ramaphane and Mohamed Osman, to the Board of Directors. Both these appointments took effect in August 2018, and increased our total number of Independent Non-Executive Directors to seven.

Their appointments were in line with our Board’s strategy of strengthening its composition with experienced, highly talented individuals with a wide range of skills, expertise and energy needed to move the business forward.

We are confident that with their wealth of experience and passion for the financial service sector, our Board members will continue to provide invaluable service to the Bank and inspire the ongoing delivery of our strategy, while delivering on their mandate.

Results

The Bank’s 2018 financial results are testimony to the resilience and dedication of our people and management. Notwithstanding the challenging operating environment, the business responded commendably with growth in profitability, discipline in containing costs and improved collection.

This latter achievement positively impacted credit impairments, an indication of the success of the Bank’s strategic approach to appropriate lending.

The Bank continues to deliver a solid performance, with strong liquidity and capital adequacy levels positioning it well for future growth.

Barclays Bank rebranding

The Bank’s transformation journey involves more than the adoption of our parent name, Absa, by June 2020. It is on track to transition into a future-fit and digitally-led organisation – ready to harness technology in a way that truly puts clients at the centre of all it does.

The separation of operations from Barclays PLC is a large and complex undertaking that is also providing the impetus for a significant strategic and cultural reset of our organisation. The transition is being executed methodically across systems, platforms, policies, procedures and more.

This involves a combination of standard lift-and-drop solutions as well as noteworthy systems refresh, along with some substantial transformation.

Human capital

The Bank’s excellent performance in 2018 would not have been possible without the dedication and determination of its people. This is most graphically illustrated by the pleasing improvement in colleague engagement, reflected in a survey of employee perceptions.

While the current performance is encouraging, there is always more that can be done. The Bank is committed to becoming a more diverse and inclusive organisation, one that identifies, nurtures and grows its talent and becomes the employer of choice in Botswana. It is the pride, enthusiasm and skills of a well-trained and confident workforce that will ensure the Bank reclaim.

Citizenship

We are aware of our responsibilities to the communities we serve, given the central role we play in the economy. In 2018, the Bank and its employees supported various initiatives that made significant improvements in efforts to uplift our communities. Community outreach development is core to the Bank’s ethos and its commitment to being a good and valued corporate citizen.

We are proud of the way in which colleagues continue to offer their services as volunteers at a wide variety of organisations.

I am exceptionally proud of the flagship programme, the Madi Majwana documentary which included highlights of the radio drama’s journey since its inception in 2013 and comprised of interviews with people from different parts of Botswana sharing their personal experiences with money. It is clear how, through this programme, we have been able to provide a unique platform to both educate and entertain children, youth and adults across Botswana about the importance of money management and personal responsibility.

The Bank also repositioned its investment in education to align with the government’s road map to refocus from being a resource-based to knowledge-based economy. It pleases me that the Barclays F.G. Mogae Scholarship Fund thus far has enabled 38 Batswana to pursue their Master’s degrees with local institutions.s its position as the leading financial services provider in the country.

Looking ahead

In 2019, the Bank will continue with its strategy to identify and grow revenue opportunities, supported by a passionate, customer-obsessed workforce. Its stated goal – to connect our clients to products and services that bring their ‘possibilities to life’ – will play a key role in helping to shape the Botswana of the future.

Thank you

Thank you to our shareholders, valued customers, management and colleagues of Barclays Bank, as well as the government, Absa Group Limited and all other stakeholders. Collectively, we have made the Bank what it is today.

We are also grateful to Keabetswe Pheko-Moshagane, our newly appointed Managing Director, for assuming the role. Keabetswe has worked very closely with Reinette van der Merwe over the past years and the Board is confident that she will provide continuity to the leadership and delivery of the Bank’s strategy.

On behalf of the Board, Management and the employees of Barclays Bank, I wish to thank Reinette for everything she has done for the Bank over the years. Her guidance and enthusiasm has been inspirational and we wish her well in her future endeavours. I would like to thank my fellow Board members for their tremendous support in realising the vision of the Bank. We still have more work to do to reach our ultimate goal of being the undisputed leading financial services provider in our market. We must also continue to make good progress on improving returns to our shareholders and delivering superior service to our customers.

Last but not least, on behalf of the Board, I extend special thanks to each of the 1 200 people who work for Barclays Bank across our branch network around the country. I have been enormously impressed by their effort, energies and ability. The results reflected in this annual report are a testament to their hard work and dedication.

Oduetse A. Motshidisi
Chairman of the Board