First National Bank of Botswana Limited Achieves 9% Balance Sheet Growth Driven by Advances to Customers

Published On: September 18, 2023Company: First National Bank of Botswana Limited (FNBB.bw)
What was the main driver for the growth in The First National Bank of Botswana's balance sheet?
The primary driver for the 9% growth in the bank’s balance sheet was the growth in advances to customers across all segments.

Financial Overview

  • The bank’s balance sheet experienced a growth of 9% which was majorly driven by advances to customers across all segments.
  • Non-Performing Loans (NPLs) increased by 8% year-on-year, with the NPL/gross advances rate remaining flat at 5%.
  • Investment securities grew 12% reflecting the successful implementation of the bank’s yield optimisation strategy.
  • Deposits from customers also grew by 9%, maintaining a loan-to-deposit ratio of 70%, signifying a well-funded position of the bank.

Income Report

  • Total bank income rose by 15% year-on-year.
  • Net interest income increased by 27% driven by a mix of volume and rate, with gross interest income growing by 36%.
  • An 86% increase in impairments was observed, although the Credit Loss Ratio remained low at 58bps.
  • Non-interest revenue saw a growth of 7%.
  • Total expenses grew 12%.
  • The bank experienced an 18% growth in Profit Before Tax, and a drop in the Cost to Income ratio from 51% to 49%.
  • Return on equity stood at 32% at the closure of the year.

Future Outlook

  • The bank expects a future characterized by fluctuations in the inflation rate, given geopolitical tensions, among other factors.
  • The bank will focus on investing in operational efficiencies, digitalisation, and Artificial Intelligence to enhance customer experience.
  • Focus will also be given to empower employees and align the bank’s practices with green and sustainable economic growth.
  • The bank ended the year with Capital and Liquidity positions well within regulatory limits.

Dividend Declaration

  • The bank has declared a final dividend of 20 thebe per share for the year ended 30 June 2023.
  • A withholding tax of 10% will be deducted from the gross dividends as per the Income Tax Act.

Useful links

About First National Bank of Botswana Limited (FNBB.bw)

First National Bank of Botswana is a financial institution listed on the Botswana Stock Exchange. The bank offers a wide range of financial services such as personal banking, corporate banking, Islamic banking and international banking. It also has a network of 80 branches spread across the country, delivering services through its own outlets and branches as well as through its Call Centre. Its core shareholder structure is comprised of the Government of Botswana, International Financial Institutions and individuals from across the country.

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