ABCH seeks $360m

Published: 26 March 2014

ABC Holdings (ABCH) seeks $360 million to capacitate it to be lender-of-last-resort to its banking subsidiaries.

This comes as last year the group secured $135 million in lines of credit out of which $95 million was invested directly in the parent company while the balance was invested in its Zimbabwean operations.

"Going forward, we would like the centre to be the lender of last resort to subsidiaries. To this end, negotiations with various investors are at an advanced stage and if successful we could raise up to $360 million in various instruments in the coming months," said the group's chairman Howard Buttery.

ABCH, through its BancABC banking subsidiaries, has operations in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe.

In the full year to December 31, 2014 the dual listed financial services group registered a 49 percent increase in profit to BWP198 million compared to BWP133 recorded in the prior period.

Buttery, however, noted that basic earnings per share rose by 10 percent from 79,6 thebe against 72,1 thebe in 2012 owing to the higher number of shares following the rights issue concluded in July 2012 and the conversion of the IFC loan to equity.

"BancABC Botswana, Zimbabwe and Zambia performed exceptionally well. However, BancABC Mozambique's performance in the current period was hampered by higher loan impairments as a result of one but large exposure.

"Notwithstanding the above, the operation still posted a profit albeit at a significantly reduced level," he said.

"BancABC Tanzania recorded an attributable loss of BWP20 million down from a loss of BWP39 million in 2012, largely due to an increase in revenue and a reduction in impairments as the non-performing accounts were all transferred into a special purpose vehicle.

"Given the challenges that we have encountered not only with the quality of the book but the legal system in Tanzania, a decision was taken to be aggressive on impairments and we will account for the write backs on receipt of the cash," said Buttery.

In the period under review, the group's number of branches increased from 61 in the prior year to 73 while the number of employees increased to 1 501 from 1 310 in December 2012.

The group's balance sheet increased by 18 percent from BWP13,4 billion to BWP15,8 billion. Loans and advances were up 15 percent from BWP9,1 billion to BWP10,6 billion.

"Deposits, on the other hand, increased by 14 percent from BWP10,7 billion to BWP12,2 billion," said the chairman. BancABC declared a dividend of 4,5 thebe (about $0,05).
- dailynews

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