Barclays ready for Non-banking sector competition

Barclays Bank Botswana, one of the leading banks in the country, this week disclosed that most of the competition it will face in future will emanate from non-bank financial institutions, partly due to consumer trends.

This was disclosed by immediate former Managing Director, Reinette van der Merwe in the company’s latest annual report published this week. The lender, which is publicly listed, has posted sustained profits in recent years, reversing prior years of tumbling profits, but acknowledges that they need to be prepared for the future with non-banks firms which, among others, include micro-lenders and some select telecoms firms which offer mobile money services. Orange Botswana, Mascom Wireless, Botswana Post and Botswana Telecommunications Corporation are all players in the mobile money services worth millions of Pula.

“Looking ahead, it is clear that in future, most of our competition will come from the non-banking sector, a change that is driven by the desire of consumers for greater convenience and the ability of technology to deliver on this. The future of banking, we believe, therefore lies in more partnerships with other businesses,” said Van Der Merwe, declaring  ‘we are ready for this’. The bank, which is now led by a local, Keabetswe Pheko-Moshagane, has reiterated it will continue to invest in technological platforms to ensure their online services are continuously ready and reliable.

A unit of ABSA group, the bank will continue to invest in human capital, which remains the cog of the business. Even on the backdrop of tough competition, record low interest rates, fragile economic growth, the bank still managed to stand tall in 2018. The benchmark interest rate is 5 percent. For the past year to December 2018, the bank posted a profit before tax of P 638 million, which represents a 14 percent growth year on year.

The profits were backed by strong growth across most segments of the business. Record low interest rates in the domestic banking market did not deter the bank from growing its loans and customer deposits which reached P11, 8 billion and 11, 9 billion respectively. Barclays, which is expected to change its name to Absa Bank Botswana subject to shareholders’ approval later this month, said it will continue to explore opportunities for growth whilst driving balance sheet efficiency and enabling greater utilisation of its electronic channels.

“The high adoption rate of our channels proves that our strategy is working and we are confident about this approach going forward. The end of our five-year strategy opens a new chapter with more possibilities. Our tried and tested strategy gives us the assurance that we will continue to be a resilient business that is relevant for the future,” stated the annual report. Meanwhile, the bank which its board is chaired by former Bank of Botswana deputy governor, Oduetse Motshidisi will hold Annual General Meeting (AGM) on the 27th of June 2019.

Among other action items for the meeting include the re-election of retiring directors in the person of Motshidisi, Alfred Dube and Kenneth Molosi. Shareholders will also have the chance to approve the name change of the bank to Absa Bank Botswana.  At the meeting, shareholders will also have the opportunity to approve directors’ remuneration as well as re-appointing KPMG as auditors for the ensuing year.