Access Bank Botswana releases its 2021 Annual Report

Access Bank Botswana Limited (ACCESS.bw) 2021 Annual Report

Chairperson’s Report

It is a great honour reporting to shareholders and all stakeholders for the first time as Access Bank Botswana, after a busy year of managing the transition whilst also pursuing the Bank’s strategy and remaining focused on our primary mandate of excellent client service.

Strategic update

The last year has been a watershed year for the bank. We started the year as BancABC Botswana, managing the impact of COVID-19 and ended the year as part of Africa’s largest bank by customers and with a renewed ambition to become Botswana’s number 1 bank. During the beginning of the second quarter of 2021, the Bank announced the acquisition of the then BancABC Botswana by Access  Bank Plc. After the announcement of the acquisition transaction, The Company worked with the prospective Group majority shareholder as well as Atlas Mara in ensuring an accelerated programme to fulfil the conditions precedent and achieve legal ownership transfer to ensure the business could return to prioritizing execution of the agreed strategy. I am glad to say that, within 6 months of the announcement of the transaction, we achieved all conditions precedent and by the end of the year had fully branded to Access Bank Botswana with very little trace of our previous name remaining.

The acquisition by Access Bank Plc accelerated the Bank’s strategy and with such strategic alignment which are very rare in acquisition transactions, we set about to agree a clear strategic direction for the business, and enablers for the achievement of all goals that had been set for stakeholders. In the recently approved five-year strategy for growth, Access Bank Botswana’s focus is to rapidly expand and diversify the business. The Bank has already begun a P200m investment programme into enhancing its distribution footprint, leveraging Group digital assets to move beyond a lending dominated book, and into a full-service digital banking ecosystem with diversified revenue lines. In this regard, it is pleasing to report that strategic implementation began immediately upon achievement of ownership transfer including bolstering execution capacity. Access Bank Plc has designated Botswana a key market it intends to succeed in and will fully support the Bank to achieve our stated business objective in the shortest space of time, leaning upon its track record of success. The Bank expects these developments to become immediately visible within the first half of 2022 and to begin being accretive to earnings in the second half of 2022. It is a great honour reporting to shareholders and all stakeholders for the first time as Access Bank Botswana, after a busy year of managing the transition whilst also pursuing the Bank’s strategy and remaining focused on our primary mandate of excellent client service.

Performance update

The underlying business remains resilient – the Bank posted growth in balance sheet drivers and non-interest income. Balance sheet growth was driven by an 8% increase in loans and advances and 5% growth in deposits. Overall, total assets grew by 3%, demonstrating how as a business we have achieved growth post an intensive COVID-19 era. Whilst profit before tax reduced by 82% to P20.8 million, income remained resilient with interest income reducing marginally by 2% whilst non-interest revenue increased by 14%.

Overall, profitably was impacted by an 18% increase in operating costs. The increase in operating costs was due to impairment of financial assets during the transition period and additional expenses related to integration to Access Bank.

The Bank continues to hold healthy capital adequacy levels at 21%. The strong capital levels position the Bank well for future growth as investment into transforming the Bank is key to unlocking growth. As we launched our strategic focus for the next five years this level of capital will be effectively and efficiently deployed into the operations.

Corporate governance

The Board continues to adhere to principles of King IV Corporate Governance. This includes ensuring that the Board of Directors comprises the appropriate balance of knowledge, skills, experience, diversity and independence for them to discharge their governance role and responsibility objectively and effectively. The board is compliant with all the 16 principles as set out in the King IV Code out of a total of 17 principles. The remaining principle is not applicable to Access Bank Botswana as it relates to an institutional investor organisation which the bank is not one.

During the year, as the Bank successfully transitioned to becoming one of the Access Bank subsidiaries, we increased the number of Board members to 10, with the appointments of Mr. Oluseyi Kumapayi and Mr. Robert Michael Yorwerth Giles, as Non – Executive Directors from the Access Bank Plc group, replacing the outgoing Mrs. Beatrice Aisha Hamza-Bassey who resigned effective 8th October 2021. We would like to thank Mrs Hamza-Bassey for her service to the Board and the Bank.

We continue exploring ways of enhancing the effectiveness of the Board and, in 2021, we engaged an external facilitator to perform an effectiveness assessment of the various Committees of the Board, individual Director self-evaluations and evaluation of the Company Secretary. Feedback from the assessment including other recommendations adopted from the Access Bank Plc group have been implemented and will continue being refined in 2022.

Acknowledgement

We extend our sincere gratitude to our customers, the Board, management, and the entire Access Bank Botswana Warriors for all their support during 2021. We remain committed to accelerated execution of our plans to grow shareholder value in the long term and thank our shareholders for renewing their commitment to the business as we seek to write a further 10 years of success for the Bank under our new parent and positive outlook.

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