Absa Bank Botswana Limited has issued a cautionary announcement to its stakeholders indicating that the company may experience a lower profits of between three hundred and four hundred million pula (P300 – P400 million).
The Company recorded six hundred and seventy eight million pula (P678 million) for the similar period last year (year ended December 2019). According to the Interim Board Chairman- Alfred M. Dube they are expecting between approximately two hundred and seventy-one million pula and three hundred and thirty-nine million pula (P271- P339 million), reflecting forty to fifty percent (40-50%) lower than the preceding year.
“Profit before tax is expected to be lower by between 40 – 50 percent (approximately BWP271 million to BWP339 million) than that reported for the year ended 31 December 2019, which amounted to P678 million.”
Dube has sited the Corona Virus Disease (COVID-19) pandemic as the underlying factor for the low profit. The company did not operate as usual and in addition had to give clients payment holidays to cushion them from the financial implications brought about by the pandemic.
“The outbreak of Covid-19 has had a significant impact on the economy and business community across different industries at large. The impact has been significant on the Company’s credit impairment provisions line given the size of the business as well the strategies deployed to support the Company’s customers during this difficult time, through extension of payment holidays and other relief programs. This increase in credit impairments provisions has materially impacted the Company’s profit before tax in comparison to prior year results.” He declared.
Meanwhile, a detailed financial report of the six months ended December 2020 is expected to be released by the 30th of March 2021. Absa joins more than a dozen other companies that recorded over ten percent (10%) lower profits than December 2019. Among those is Absa’s rival First National Bank Botswana (FNBB).