Access Bank Botswana Invests Heavily into its Business Expansion and Leads with Execution
The Bank intends to be a full-scale ecosystem player offering new, inter- connected services across customer needs on its way to Number 1 bank in Botswana by 2027.
Access Bank revealed its Botswana strategy –
*Become the number 1 bank in Botswana by 2027
Intends to ensure that it brings services directly to within 1 km of the customer everywhere they are in Botswana
*Will deploy 55 ATMs in the next 3 months, with 36 to be available for customer use by end April and the rest by end June. The Bank aims to reach 100 ATMs within next 12 months
*Open up Agency Banking with a partner which will give customers access to 1,000 cash in and out points within the next 3 months
*Open up 9 new service centres in new areas in Botswana to service customers within their geography
*The Bank says it will take advantage of the recent COVID-19 driven digitisation leveraging Group digital assets to move beyond a lending dominated book into a full-service digital banking ecosystem with diversified revenue lines
*Access Bank PLC has designated Botswana a key market it intends to succeed in and will fully support the Company to achieve its stated business objective in the shortest space of time, leaning upon its track record of
*The Company expects these developments to become immediately visible within the first half of 2022 and to begin being accretive to earnings in the second half of 2022
THE FINANCIAL RESULTS–
*Net revenue before impairments remained resilient, reducing only by P4m from P545m to P540m.
*Underlying business performance robust despite a focus on closing the transition to Access Bank PLC
*Grew Fee Income by 14%, Digital Income doubled and Trading Income was up 39%
*Strong balance sheet growth with Loans and Advances growing 8%
*The bank is strongly capitalized with Capital adequacy levels of 21% against regulatory capital requirement of 5%
*Impairment increased due to reclassification of Related Party Group exposures into normal advances to banks which need to be provided
*Declared 2.2t dividend and foresees continued dividend paying capacity in the years
On 31 March 2022, Access Bank Botswana, the BSE-listed bank, a subsidiary of Access Bank PLC with an extensive footprint spanning three continents and 12 countries, announced its annual results for the year ended 31 December 2021 and took the opportunity to present its 5 year strategic vision. The highlight for the bank in the year was the complete transformation from the former BancABC to Access Bank within just 6 months.
Notable is that the bank immediately embarked on an accelerated investment programme to create capacity for future growth in line with its approved 5-year strategy to enhance its distribution footprint, leverage Group digital assets to move beyond a lending dominated book into a full-service digital banking ecosystem with diversified revenue lines. The Bank has invested P200m towards more ATMs, Digital Banking platforms, increased footprint as well as acquiring talent to complete its transformation as it aims to become the Number 1 bank in Botswana by 2027.
The Bank’s financial performance reflects resilience within its income lines, with total non- interest revenue achieving an impressive double-digit growth of 14% to P139.3 million compared to the corresponding period. The solid performance was mainly driven by a robust foreign exchange income performance and improvement in the revenues earned from the digital platforms such as Sarumoney and the introduction of digital products such as the FastCash cashless withdrawal, Point of Sale terminals and better fee collection in the year. The growth garnered from these platforms proves that the investment made to date is in the right direction.
Access Bank Botswana Managing Director Kgotso Bannalotlhe said, “We are part of a pan African Banking Group with a global presence that leads with bold ambition, execution and investment support towards achieving its business goals. We have been hard at work deploying over P200m of investment into 55 new ATMs which we have been progressively rolling out and will have this completed by end June. We are opening up 9 new service centres across the country and introducing relevant propositions and products. We want to ensure 1 in 3 transactions that happen in Botswana happen on our platforms on our journey to being number 1 bank in Botswana by 2027.”
For the full-year ending 31 December 2021, Access Bank Botswana delivered a 3% growth in the overall balance sheet. Loans and advances reflect an increase of 8% to P6.5million year-on-year. The growth is attributed to higher retail loan sales and a significant boost from the Wholesale Banking business. As a result, total deposits increased by 5% year on year. During the reporting period, the company achieved a critical development, the successful conclusion of the Access Bank transaction. The transition continues post year-end, as the
Bank ensures full integration, including technology, core banking and card platforms migration.
The acquisition is set to accelerate growth and reposition Access Bank Botswana, given a strong retail banking operation coupled with world-class digital and wholesale banking capabilities, augmenting itself as one of Botswana’s leading banks. Notably, 2021 was a transitional year for the Bank; therefore, it incurred transitional one- off costs to implement and manage the rebrand. Thus, total expenses increased by 18% to P497.8 million. Bottom line profitability was therefore reduced significantly by these transitional factors. The bank declared the entire year profitability as dividend, saying that parental strength and good growth prospects means it will resume paying dividends in the years ahead.
“During the 2021 full year, we deployed a substantial sum of capital to ensure we create capacity to enhance our distribution footprint by realigning our digital assets to that of the Group to reposition the Bank as a full-service digital banking ecosystem with diversified income streams. This capital investment is expected to benefit Access Bank Botswana in rapidly scaling the retail and wholesale banking platforms to achieve critical mass, which will drive profitability in the medium- term,” commented Ratang Icho-Molebatsi, Access Bank Botswana Finance Director.
During the financial year under review, the Bank’s operating expenses also increased due to an increase in inflation. The Bank continues to hold strong capital adequacy of 21%, allowing headroom for future growth, particularly for upcoming investments to support the strategic focus for the next five years. Icho-Molebatsi added, “Following the finalisation of the Access Bank transaction, we have received strong backing and support from group level. As a team, we have identified ways to rapidly scale our business as well as cost synergies that will ultimately bear fruit in the strategic period of 5 years.”
In conclusion, Bannalotlhe said, “As Access Bank, we are primed to unlock opportunities through our embedded culture of speed to service, innovation and customer-centricity as well as unwavering support of a strong parent. We are leading our strategy with investment upfront. I am confident that the strengths and capabilities within our people position us well to take on the bold task ahead. We will remain focused on delivering to our strategic priorities whilst ensuring we create sustainable value for all our stakeholders.”