FNBB Registers 18% Increase In Profit; Plans To Double Down On AI Investment

First National Bank Botswana (FNBB) has registered an 18% increase in profit before tax over the 12 months of operations ending 30 June 2023. The total profit was P1.42 billion.

The bank’s balance sheet grew 9% year-on-year, driven mainly by growth in advances to customers across all segments. Corporate advances are 11% up, while commercial and retail advances are at 8% and 7% respectively. The growth in corporate advances was driven by working capital support to State Owned Enterprises (SOE) and Fast Moving Consumer Goods (FMCG) sectors, as well as leverage finance deals in the financial services sector.

Perhaps reflective of just how detrimental inflation has been on Botswana households, the bank's Non-Performing Loans (NPLs) increased by 8% year-on-year from P802 million to P863 million.  Conversely, deposits from customers increased by 9%. Retail and commercial deposits grew 11% year-on-year, with the loan-to-deposit ratio at 70%. 

The bank's income grew 15% year-on-year,  with non-interest revenue increasing by 7% year-on-year. The increase was driven primarily by increased transactional volumes in service and other fees. The growth in service fees and card commissions followed increased uptake and utilisation across the bank’s digital and electronic channels, especially in convenience channels.

On the expenses column of the bank's balance sheet, total expenses grew 12% reflecting increased investments in human capital and technology. Total employee costs were up 16% year-on-year, while IT support and development costs grew 36%. A further spike in operational costs came with the rebranding journey the bank undertook, which saw marketing and advertising expenses growing 31% year-on-year.

On the back of these results, FNBB will be providing its shareholders dividends of 20 thebe. In FY 2024, the bank stated that it would double down on investments in operational efficiencies will maintain focus on increasing delivery of digitalisation and Artificial Intelligence (AI), specifically aimed at further enhancing customer experience through innovations around products and services.

"A forward-thinking approach to technology and innovation has been, and remains a top priority for FNBB, including the attendant need to continually enhance measures to guard against cybercrime," the bank stated.

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