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ABC Releases Financials

AFTER being ranked as the best bank for the financial year ending December 31 2007 after an assessment of seven parameters, ABC’s financial results were expected to be what the doctor ordered for their investors, clients and shareholders.

ABC was ranked the best after assessing the other banks’ profit after tax, total assets, cost ratio, total deposits, percent of other income, interest margin and return on assets.

Against the yardstick of the above parameters, the performance of the banking subsidiaries showed marked improvements, demonstrating the group’s resilience in the face of global challenges.

However this improvement was negated by a decline in investment income in Zimbabwe and a loss posted by ABC Zambia.

“Attributable profit to ordinary shareholders at 86 million Botswana pula is 31% lower than 124 million pula reported the prior year. This is largely due to lower mark to market gains on our investment portfolio in Zimbabwe, which decreased by 78% from 116 million pula in 2007 to 26 million pula during the year,” said ABC chief executive officer Douglas Munatsi.

Munatsi said notwithstanding this development, total  incomes before impairments increased by 18% to 400 million pula , up from 339 million pula. Net interest income increased by 72% from 107 million pula in 2007 to 184 million pula during the period under review.

“ABC Botswana’s profit after tax of 13 million pula is 70% up from last year. All revenue lines were significantly better than what was achieved in the comparative period.

The above was achieved in spite of the increase in impairments. From 15 million pula to 22 million pula.,” Munatsi said.

ABC Tanzania achieved a profit after tax of 11 million pula against 6 million pula achieved the previous year. ABC Mozambique continued to do well and recorded an after tax profit of 17 million pula which is 25% ahead of last year.

“ABC Zambia posted a loss of 12 million pula. The loss was due to high level of impairments, coupled with a huge exchange loss in November because of the volatility of the Kwacha,” said Munatsi.

The group’s net interest income increased by 72% from 107 million pula recorded in November 2007 to 184 million pula.

All operating subsidiaries with the exception of ABC Zimbabwe recorded significant growth during the year.

Average net interest margins improved from 4,59% in 2007 to 6,20% for the year ended December 31 2008.

“The quality f earnings continues to improve as evidenced by the increase in net interest income to total income to 51,7% in 2008 from 35% reported the prior year,” said Munatsi.

Net interest income now covers 78% of operating cost up from 67% last year.

The group’s total balance sheet increased by 38% from 2,9 billion pula as at December 31 2007 to 4 billion pula as at December 31 2008.


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