Group related article
March 30, 2015
Although the audited financial results for the year ended 31
December 2014 were marked by mixed performances across the
countries in which BancABC operates, several significant events
that occurred during 2014 will place the bank in a more favourable
position for strong growth during the current financial year and
beyond, ABC Holdings said today 30thMarch 2015.
Announcing the results, Dr Blessing Mudavanhu, Acting Group
Chief Executive Officer, said the Group recorded an attributable
loss of BWP 438 million compared to an attributable profit of
BWP198 million in 2013. This was largely due to increased
impairments, reduced margins and increased operating expense.
The bulk of the credit impairment charges incurred during 2014
were, however, primarily once-off and should be seen as part of the
Group's conservative approach towards managing credit risk.
The bank continues to focus on improving its credit management
processes and building a quality loan portfolio across all business
segments. A dedicated team of highly experienced staff was also set
to collect on non-performing loans. Changes undertaken to date are
already bearing fruit and it can be expected that going forward,
the Group's credit impairments will be brought in line with its
The Group's balance sheet remains strong. Customer
deposits, increased by 16% and this extra funding was deployed
mostly into liquid assets and to a lesser extent loans and
advances. Cash and short-term funds increased by 40%, which
reflects the increased liquidity of the Group's balance sheet.
Banking subsidiaries recorded an attributable loss of BWP65
million compared to an attributable profit of BWP310 million
registered in 2013, with all entities registering a decline in
profitability largely due to higher impairments.
The loss in head office entities together with consolidation
adjustments increased from BWP112 million to BWP372 million in the
current year. This was on account of several factors including a
BWP85 million increase in credit impairments charges on a handful
of loans in Tanzania that are centrally managed, increased interest
expense on funding used to bolster capital positions in
subsidiaries towards the end of 2013, BWP69 million in fair value
losses on financial investments and write-off of deferred tax
assets amounting to BWP44 million. Termination benefits to the
previous executive management also increased the loss at head
office in 2014.
BancABC Botswana's attributable profit of BWP71 million was 53%
lower than what was achieved in 2013. Performance was impacted by a
decline net interest margins as well impairments which increased
from BWP42 million in 2013 to BWP110 million in 2014.
However, the quality of the loan book remained relatively stable
with the gross NPL ratio of 3.9% (2013: 2.9%) and net NPL ratio of
0.7% (2013: 1.2%).
BancABC Mozambique recorded an attributable loss of BWP14
million compared to an attributable profit of BWP9 million in 2013,
largely due to growth in operating expenses which emanated from
BancABC's strategy of expanding its reach throughout the
BancABC Tanzania posted an attributable loss of BWP123
million. This was higher than the loss for prior year of
BWP20 million largely due to a mix of higher impairments, lower
trading income as well as increased operating expenses in the year
under review. The subsidiary's loan book grew by 13% from
BWP575 million to BWP650 million with the retail portion of the
loan book growing from 27% in 2013 to 47% in 2014. Deposits
marginally declined from BWP1,299 million to BWP1,284 million in
the current year.
BancABC Zambia's attributable profit declined from BWP50 million
in 2013 to BWP4 million in 2014. The major causes of the decline in
profitability were the reduction in interest margins as well as
increased impairments. The entity's loan book marginally
declined by 3% from BWP1.39 billion to BWP1.35 billion.
However customer deposits increased by a substantial 58% from
BWP1.1 billion to BWP1.8 billion.
BancABC Zimbabwe posted an attributable loss of BWP3 million
compared to an attributable profit of BWP118 million in 2013.
This was due to increased impairments due to a tough operating
Setting a positive base for growth in 2015 and
The highlight of the year under review was the acquisition of
the majority of BancABC's shares by Atlas Mara Limited (ATMA),
which now holds 98.7% of the shares in the Group. Since the
close of the transaction ATMA has injected a total of US $100
million into the Group. The major benefits of this
transaction include access to more funding, management depth and a
stronger technology platform. BancABC will benefit from being
a part of a larger Group which is poised to be a significant player
in the sub-Saharan landscape.
The ATMA relationship is already beginning to bear fruit as
evidenced by the Group's closing of the following funding
- The European Investment Bank loan facility of €65 million.
- The African Development Bank loan facility for US $50 million
facility for on-lending to SMEs and small corporates.
- The World Business Capital provision of a facility of US $7.5
million to BancABC Zambia to support the increasing demand in the
country for SME lending.
ATMA Chief Executive Officer, John F Vitalo, stated that it is
both challenging and exciting to be part of a visionary business.
"Our goal is to be a top 5 player in the markets in which we
operate. To do this we need the best talent, the right systems, and
the right products. We seek to be a positive disruptive force in
our markets." He said.
Working with ATMA, ABCH expects to close further significant
funding arrangements in 2015, to support its business expansion
whilst lengthening the depth of the funding base.
About ABC Holdings
ABC Holdings Limited is the parent company of a number of banks
operating under the BancABC brand in Southern Africa, with
operations in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe.
A representative office as well as group management support
services company is located in Johannesburg, South Africa.
Our vision is to be Africa's preferred banking partner by
offering world class financial solutions. We will realise this by
building profitable, lifelong customer relationships through the
provision of a wide range of innovative financial products and
services to benefit all our stakeholders.
The Group offers a diverse range of products in corporate
banking, treasury services, Retail & SME Banking, asset
management and stockbroking.
For more information visit www.bancabc.com
or please contact:
Wallace Siakachoma BancABC- Acting Group Chief Financial
Leah Banda: BancABC-Group Head-Marketing & Communications:
About Atlas Mara
Atlas Mara was formed by Bob Diamond, CEO and Founder of Atlas
Merchant Capital LLC and Ashish J. Thakkar, Founder of Mara Group
Holdings Limited, and listed on the main market of the London Stock
Exchange in December 2013.
Atlas Mara Vision is to create Sub-Saharan Africa's premier
financial services institution through a combination of its
experience, expertise and access to capital, liquidity and funding.
The goals are to combine the best of global institutional knowledge
with extensive local insights and experience and to support
economic growth and financial inclusion in the countries in which
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