Letshego nets P1.8 billion

Revenue raked from Non-Interest Income

Group posts 12% growth on Net Advances

Downward pressures affect all 11 markets

BAKANG TIRO

editors@thepatriot.co.bw

Home grown diverse Pan African micro lender, Letshego Holdings Limited has posted record impressive results by accruing Net Interest Income worth P1.861 billion despite Covid-19 in 2020.

The Botswana Stock Exchange Limited (BSE) listed entity has said that the recorded P1.8 billion in Net Interest Income was above their expectations in light of unpredictable economic conditions.

Net Interest Income, according to the Group Chief Executive Officer (CEO) Andrew Okai, was below the P2.051 billion achieved in 2019. The company’s average monthly net payouts increased by 29% between H1 and H2 in 2020.

“Borrowing costs were largely flat year-on-year, with the Group making the progress within its funding diversification strategy.On funded income, we have successfully renegotiated our insurance arrangements in Namibia, so as to align with the regulatory caps introduced in 2019,” stated Okai.

Okai said recording over P1 billion in profit before tax, despite ongoing challenging economic conditions, was indicative of Letshego strong business foundations and commitment to its people.

“Net advances increased 12% for the year, spurred by increased economic activity in the second half following the gradual easing of lockdowns. Our results have been boosted by a strong digital drive, with take up of alternate channels rising from 2% in 2019, to 69% by the end of 2020,” he added.

Regarding subsidiary performance, Letshego Group CEO said virtually all of Letshego’s 11 subsidiaries were impacted by downward pressures on demand brought on by the pandemic.

However, in the second half, most of its markets saw measured resurgence in activity with the stronger performance coming from Ghana, Lesotho, Mozambique and Kenya markets.

“Ghana’s performance was boosted by growth of our core DAS business and the resolution of challenges in mobile loan reconciliations and impairments in 2019, generating improvement in profit before tax from BWP14 million FY2019 to BWP116million FY2020. Lesotho too demonstrated strong returns in performance, with profits increasing by 45% year-on-year,” buttressed Okai.

Briefing journalists in a virtual roundtable discussion in March, buoyant Okai said digitalisation forms the core part of diversifying the group’s funding base, adding that it was well achieved during plan 6. 

Oozing with confidence, Okai said the underlined growth in the overall business performance was underpinned by the effective implementation of the key plans, saying a lot will be achieved.

“COVID-19 prompted the Group to revisit and reinforce our business continuity and the disaster recovery plans establishing the same theme of resilience to manage ongoing unpredictable infection waves and challenging conditions,” said Okai in the 2020 Letshego Annual Report released this week.

Letshego Group Chairman Enos Banda said their deep transformation into an agile and digitally empowered organisation goes hand in hand with their step change in focus on communities, social and environmental impact of Letshego Group’s commercial activities.

“Now that Letshego has emerged from the first year of COVID-19 having achieved milestone transformations, the solid financial results and renewed purpose, the Board is aligned on our priorities for the current 2021 financial year – Deepening our existing footprint, and supporting our regional business to uphold governance and risk standards while expanding demonstrable value for our people, customers, stakeholders and communities,” said the optimistic chairman.

In addition, Banda has indicated that the Board has reiterated its optimism in the business by declaring a final dividend of 8.3 Thebe, per share despite the difficult operating environment.