[2008-07-07]  Stanchart profits grow in first quarter
BSE-listed Standard Chartered Bank Botswana has reported an earnings growth of 28.5 percent for the first quarter of 2008, according to a Stockbrokers Botswana report.


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For the period under review, the bank's interest income rose by 12.8 percent against the comparable period last year to P303m, while interest expense went up by 8.9 percent to P181m. Net interest income rose by 19.2 percent to P122m.

Other operating income rose by 10.3 percent to P46.9m while operating expenses dropped by 6.7 percent to P56.7m. The impairment charge increased by about P5.6m to P10.6m, being about 0.3 percent of the loan book. Net income after tax increased by 28.5 percent to P78.9m. The counter lost 10.7 percent during the period under review.

"The Board of Directors has declared an interim dividend of 24.30thebe per share, which is payable on or about 11 July 2008 to shareholders registered at the close of business on 4 July 2008," the report said.

The growth in earnings should be a positive fundamental for the bank's stock, which has just begun to rise again on the local bourse. After months of heavy battering induced by a market correction exercise, the bank's share price has been rising in the past month and indications are that it could re-touch its high of P28 per share in the short-term. The bank seems to be coming out of the woods following last year's less than satisfactory results, which were pulled down by large impairment charges to cover for collapsed Lobtrans loans.

A massive P74,9 million impairment charge mainly to cover for losses in the Lobtrans saga dragged down Standard Chartered's profits by 7 percent for the year ended 31 December 2007.

According to the company's statement of results for that period, profit after taxation went down from P257,9 million in 2006 to P239,3 million in 2007. Lobtrans was placed under provisional liquidation in January this year after it was discovered that the company was in heavy debts amounting to hundreds of millions of Pula and it was Barclays Bank Botswana and Standard Chartered Bank Botswana Limited that petitioned for Lobtrans to be put placed under provisional liquidation.

Finance house ABC Bank was also not spared and was forced to put up a P13million impairment charge in the 2007 financial results to cover for the anticipated losses. In 2007, Stancharts's consumer banking assets grew by 13 percent to P2.4 billion, while earning assets in the wholesale banking business grew modestly by 4,6 percent, largely reflecting the reality of a fiercely competitive environment.


Source: © MMEGI 2002 - 2008