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ABC Holdings Limited released good results for the six months ended 30 June 2008. Net interest income for financial operations went up 68% to BWP89.9mn from BWP53.7mn in the previous period. Non interest income increased by 89% to BWP158.2mn on the back of an increase in foreign currency trading volumes, particularly in Botswana, in spite of a reduction in margins as competition intensifies. Impairment losses on loans and advances went up 168% to P12.6 million due to higher portfolio impairment requirements as a result of growth in the lending portfolio and individually impaired accounts.ABC Botswana contributed 65% to the overall impairments. This was largely as a result of one client that was placed under liquidation. Operating expenses went up 51% to P106.9 million, with information technology and an increase in head count and other staff related expenses being the major drivers of this increase. Costs are projected to rise due to the roll out of retail network. The cost-to- income ratio slightly dropped to 46% in line with the company’s long term target of 40%. The Group registered a bottom line of P74.8 million, up 234% from the previous period. An interim gross dividend of 8 thebe per ordinary share has been declared and is payable on 30 September 2008. On 26 June 2008 the Group signed a US$ 25 million convertible loan agreement with Citi Venture Capital International (“CVCI”), a business unit of Citi Alternative Investments Limited. In order to bolster its growth ambitions, the Group intends to raise a US$ 150 million by way of a Rights Issue. Both the CVCI and Rights Issue are subject to shareholders’ approval.
