Zimbabwe: ABC Profit Jumps 51 percent

ABC Holdings attributable profit for the interim period to June 30, 2012 jumped by 51 percent to 56 million Botswana pula, driven by strong income from wholesale and retail banking operations.

But group profits were weighed down by head office and non-banking operations loss of BWP 56 million in the first six months.

Basic earnings per share rose to 37,2 thebe from 25,9 thebe in the same period last year while diluted earnings per share increased to 31,1 thebe from 24,6 thebe last year.

Four of the group’s banking operations in Zimbabwe, Botswana, Zambia and Mozambique recorded profits in the half year.

ABC said Tanzania operations slumped to a BWP5 million loss from BWP10 million profit in the same period last year, due to reduction in interest income and impairments.

The financial services group has a primary listing on the Botswana Stock Exchange and therefore uses the Botswana pula (BWP) as the reporting currency for its financial results. ABC has a secondary listing on the Zimbabwe Stock Exchange.

Group chairman Mr Howard Buttery and group chief executive Mr Doug Munatsi said although the environment could get tougher they remained confident of sustaining recent growth.

“A slowdown in global growth will necessarily mean that the environment in which we operate will continue to be challenging,” he said.

“Major financial systems in the world will suffer the most and recent debacle on Libor setting does not help boost confidence in banking. Regrettably, this is now the new normal. Notwithstanding the above, we are confident that the growth we have seen in the recent past will continue unabated.”

Net operating income rose by 45 percent to BWP97 million. Total income jumped 53 percent to BWP476 million while operating expenses rose 55 percent to BWP 379 million.

Zimbabwe operations contributed BWP38 million on the back of a 30 percent increase in profitability and 45 percent jump in interest income while non-interest income vaulted 77 percent.

Banking deposits increased by 19 percent since December 2011 and 46 percent from June 2011, to BWP8, 8 billion as loans and advances increased by 29 percent since December 2011 and 95 percent from June 2011 to BWP7,8 billion.

The group saw profitability almost triple at BancABC Zambia to BWP 17 million from BWP6 million the prior year on the back of growth in consumer lending and non-funded trade finance transactions in the wholesale banking division.

In Mozambique, profitability almost doubled to BWP14 million thanks mainly to an increase in net interest income as the balance sheet and margins increased during the period under review.

BancABC Botswana performed well in the interim period as attributable profit grew by 228 percent to BWP 36 million after a 126 percent jump in income to BWP109 million.

The strong performance was driven by an increase in net interest income from increased consumer lending and group loans. ABC said that total assets increased by 18 percent since December 2011 and by 47 percent from June 2011 to BWP10,8 billion while the group’s total retail branches increased from 35 in June 2011 to 55 in the 12 months June 2012.

Included in head office entities loss was a BWP 8 million market to market loss in respect of PG Zimbabwe and loss from associate, PG Botswana from BWP4,5 million last year.