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Barclays brace for periods of low interest rates

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Barclays Bank Botswana has posted an improved profit for the full year to December 2017 despite operating under weak economy, which is also characterised by low interest rates. Presenting the lender’s results recently, Managing Director, Reinette van der Merwe, announced that profit before tax leapfrogged by 13 percent to close the year at P558 million. “As the bank’s leadership, we are proud to have achieved this feat despite the challenging and competitive environment that we operate in,” said Merwe last Thursday. Revenue for the listed company remained flat at P1.46 billion.

The bank, which also depends on interest income for profit, said income was flat as a result of low interest rates. In October 2017, Bank of Botswana reduced key lending rate by 50 basis points to five percent. The bank, which is a unit of Barclays Africa, said they remained profitable despite intense competition in the banking sector and fragile economic recovery. Loans and advances also increased to P10.7 billion, representing a 14 percent year on year rise. Merwe stated that operating costs were contained due to rationalisation. The bank will continue to implement responsible lending so as to minimise impairments.

The bank’s Board Chairman Oduetse Motshidisi noted at the event that, ‘the results speak quite a lot about the strategy,’ which he said is solid. “We have a winning strategy,” he stressed. Oduetse, who was appointed Chairman last year, told the gathering that, the bank shall brace for prolonged periods of low interest rates. Meanwhile, Barclays also announced that a dividend of 21.23 thebe per share has been declared. “The dividend payout of 65 percent of our earnings in 2017 is slightly above average payout ratio of 60 percent over the last few years,” said Merwe. She said going forward, the bank will continue with strategic partnerships, digital banking and improving customer services, among others.

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BSE complies with reporting guidelines

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Botswana Stock Exchange Limited (BSEL) has become the 5th bourse in Africa to comply and publish Environment, Social and Governance (ESG) reporting guidelines.

The development comes a year after BSEL became a partner exchange of the United Nations Sustainable Stock Exchange (SSE) Initiative.“The BSE made a commitment to publish guidance on ESG Reporting. This commitment has been fulfilled.“

We are the 42nd among the 81 SSE Partner Exchanges globally and the 5th in Africa to do this,” said Kgotla Segwe, Market Development Specialist at Botswana Stock Exchange Limited.
Other stock exchanges that have complied with the SSE initiative on the continent are from South Africa, Nigeria, Morocco and Egypt.

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Mobile operators look to digital inclusion

Keikantse Lesemela

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Mascom MD Jose Couciero.

Mascom Chief Executive, Jose Couciero said they are looking into digital inclusion as the potential source of revenue growth because mobile subscription is no longer a major driver.

Botswana has one of the highest records of mobile penetration in Africa at 176 percent, Internet users’ stand at 21.4 percent while the fixed line telephony services stand at 8.2 percent. “As the Botswana mobile market evolves, we observe that mobile subscriber growth alone is no longer a major driver for revenue growth. Rather, the potential for the market is in digital inclusion through access to mobile and fixed broadband,” Couciero.

He said they have invested significantly in deploying their own transmission backbone and Metropolitan fibre rings to prepare their business to enter the residential markets with bundle offers of Internet, voice and content. “I am excited to confirm that we now offer fixed broadband services using both fibre and 4.5G wireless technology. These technologies offer high speed internet for TV live streaming and online games without interruptions,” he said.

Meanwhile, the government owned Botswana Telecommunications Corporation Limited (BTCL) observed the increased usage of social media platforms which has negatively affected the traditional voice call services resulting in decreased turnover for the company. Recently, BTCL Managing Director, Anthony Masunga also highlighted that competition in the telecommunications sector continued to intensify with the entry of new internet service providers leading to a downward pressure on prices.

On the other hand, another competitor, Orange Botswana is currently constructing a data centre which will enable the company to offer telecommunication and internet services without interruptions. The Orange Data Centre will cover 81% of the population with the 2G technology, 62% of the population with 3G technology and 45% of the population with 4G technology, offering the greater levels of security, flexibility and accessibility to data and information around the world.

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