First National Bank of Botswana Limited Shows Resilience Amidst Economic Challenges, Reports 151-Point Increase in Interest Rates

Published On: October 16, 2023Company: First National Bank of Botswana Limited (FNBB.bw)
What major challenges were faced by FNB Botswana during the year under review?
The major challenges included supply chain constraints due to the Russia/Ukraine conflict, inflation caused by high commodity prices, an increase in interest rates and additional competition due to changes in the Banking Act.

Summary

  • FNB Botswana has shown resilience in challenging economic conditions due to inflation, supply chain constraints and the Russia/Ukraine conflict which led to price adjustments and a contraction in grain and fertiliser supply to Africa that influenced interest rates.
  • Botswana experienced a 151-point increase in interest rates due to adopted inflation control measures of the US Federal Reserve, impacting retail clients’ savings and corporate balance sheets.
  • Income from diamonds remained resilient due to strong demand as sanctions on Russia prevented disastrous effects on the local economy.
  • The Bank of Botswana published a re-enactment of the Banking Act, potentially making way for non-deposit-taking institutions to offer traditional banking products, posing additional competition.
  • New guidelines on Corporate Governance for Banks were published to strengthen the governance of banks, including requirements for Board sub-committees and data protection.
  • The economic volatility prompted the introduction of the Economic Recovery and Transformation Plan (ERTP) which provides opportunities to stimulate economic growth, particularly in agriculture and manufacturing.
  • FNB Botswana’s strategy implementation included the digital migration of clients, financial literacy campaigns, and the extension of digital platforms such as eWallet and CashPlus.
  • Considerable progress was made in providing professional banking services to the underbanked and underserved populations.
  • FNB’s Board comprises 12 members and a strong succession plan is in place.
  • ESG has been integrated into business activities, with the Board approving an overarching ESG policy.
  • A final dividend of 20,00 thebe was proposed, which would be in addition to an interim dividend of 12,00 thebe paid to ordinary shareholders.
  • During the coming year, economic activity and business activity are expected to improve nationally and internationally.

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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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