“This is reflective of the value the bank is creating for its shareholders”
as share price jumps
Standard Chartered Botswana has come to the market with 3 times better results for its half year ended 30 June 2023, reporting a 239% increase in profit before tax to P241 million. This was the bank’s highest half-year profit since 2014.
Against the background of a 30% growth in income, key performance indicators trended upwards. Return on tangible equity (ROTE) which measures how much profit the bank gives back to its investors given the investments they have put in, registered a 32% growth. According to Tapiwa Butale, the Chief Finance Officer (CFO) of the country’s oldest bank, the target is to return atleast 10% of the investment that every investor invested.
Return on Equity (ROE) came in at 34% against the industry average of 16.4%, said Butale, emphasising that this is reflective of the value the bank is creating for its shareholders. In this same confidence, performance was reflected in the share price performance. Within the first half of the year, the bank’s share price was the best-performing stock on the Botswana Stock Exchange (BSE), recording a year-to-date growth of 43.9% by June 2023. The Bank’s share price was trading at P4.13 as at 30 June 2023 from an opening price of P2.87 at the beginning of the year. At the time of writing, the share price was trading at P5.10. It is good progress in terms of share price which Butale views as “reflective of the confidence that our investors have in our strategy”.
The bank was able to protect and defend its balance sheet despite the volatile operating environment. Asset book increased 15% year-on-year attributed to facility utilisation. “We did benefit from the rate hike yes, and on average that was P50 million,” Butale said during the presentation of the results adding that loans and advances for corporate went up by over 200%. “Growth in terms of our margin income performance was coming majorly from the growth in the book.” The Bank said its strategic intention to drive short-term loans and targeted campaigns are expected to sustain asset book growth. Credit impairment normalised to P31 million and the portfolio remains resilient with a lower loan loss ratio.
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