Business / Companies
ABC Holdings released a robust set of interim results
17 Aug 2011 at 03:47hrs | Views
ABCH released a robust set of interim results showing a PBT of BWP 62.6m, up 84% year on year.
The successful promotion of cheaper deposits boosted the Group's net interest margin to 10.2%. Earnings were further beefed up by the BWP 60.6m fee & commission income, BWP 51.8 million forex earnings and BWP 22.8m trading income. The cost to income ratio improved to 72% from 77% as opex increased 19% impacted by the retail banking roll out.
The short to medium term target cost to income ratio for the group is 50%. An interim dividend of 6.8 thebe (1.04 US cents) a share was declared, implying a dividend cover of 3.6x. The LDR is Friday 02 September 2011.
The balance sheet increased 23% over FY 2010 to BWP 7.4 billion ($1.1 billion) as deposits and advances grew 22% and 31% respectively. The quality of the book improved as NPLs declined to 5.5% of advances from 9.4%, although this remains way above group target of 3%. Tanzania contributed BWP 11.5 million to group impairments whilst Zimbabwe contributed BWP 8.0 million. The group's gearing ratio deteriorated to 151% from 137% as the group accessed an additional $13.5 million from the IFC convertible line of credit at LIBOR + 3.25%.
RoaA and RoaE ratios of 0.2% and 18% are low when compared to BSE listed peers.
Zimbabwe contributed the bulk of the financial institutions profits at BWP 38.4m (52%), Botswana 15%, Tanzania 14%, Mozambique 11% and Zambia 8%. Zimbabwe witnessed strong growth, albeit off a low base. Mozambique was negatively impacted by the appreciation of the Meticais.
The group is evaluating different options of raising additional capital with may result in a possible private placement. This may result in further dilution to existing shareholders.
The group's performance provides a base for solid growth. Nonetheless, we remain more cautious because of the uncertainty of bad debts. The counter is up some 42% YTD. The share is tightly held, limiting downside risk. Addmore Chakurira of Imara Stockbrokers recommended a Spec Buy for the stock.
The successful promotion of cheaper deposits boosted the Group's net interest margin to 10.2%. Earnings were further beefed up by the BWP 60.6m fee & commission income, BWP 51.8 million forex earnings and BWP 22.8m trading income. The cost to income ratio improved to 72% from 77% as opex increased 19% impacted by the retail banking roll out.
The short to medium term target cost to income ratio for the group is 50%. An interim dividend of 6.8 thebe (1.04 US cents) a share was declared, implying a dividend cover of 3.6x. The LDR is Friday 02 September 2011.
The balance sheet increased 23% over FY 2010 to BWP 7.4 billion ($1.1 billion) as deposits and advances grew 22% and 31% respectively. The quality of the book improved as NPLs declined to 5.5% of advances from 9.4%, although this remains way above group target of 3%. Tanzania contributed BWP 11.5 million to group impairments whilst Zimbabwe contributed BWP 8.0 million. The group's gearing ratio deteriorated to 151% from 137% as the group accessed an additional $13.5 million from the IFC convertible line of credit at LIBOR + 3.25%.
Zimbabwe contributed the bulk of the financial institutions profits at BWP 38.4m (52%), Botswana 15%, Tanzania 14%, Mozambique 11% and Zambia 8%. Zimbabwe witnessed strong growth, albeit off a low base. Mozambique was negatively impacted by the appreciation of the Meticais.
The group is evaluating different options of raising additional capital with may result in a possible private placement. This may result in further dilution to existing shareholders.
The group's performance provides a base for solid growth. Nonetheless, we remain more cautious because of the uncertainty of bad debts. The counter is up some 42% YTD. The share is tightly held, limiting downside risk. Addmore Chakurira of Imara Stockbrokers recommended a Spec Buy for the stock.
Source - Imara Stockbrokers
