MASERU — Standard Lesotho Bank has posted impressive financial results registering an after tax profit of M153 million in the past year.
Standard Lesotho Bank managing director, Roger Snelgar told the Lesotho Times this week that the results represented a 12.4 percent increase over the previous year’s results.
Snelgar said the profit increase was mainly driven by retail banking and increased transactions volume for the year 2009.
“In general Lesotho banks performed better than most African banks. However, like other banks we had a tough period in the past two years,” Snelgar said.
He added that they remained cautiously optimistic over prospects for growth in Lesotho.
Snelgar attributed the bank’s good performance to solid monetary policy management which had cushioned Lesotho and other countries in the common monetary area from the full effects of the global financial crisis.
“It is a sound performance in the light of what has been happening in Africa and the rest of the world,” Snelgar said.
“Locally we felt the economic impact of the global financial crisis through the decline of orders in textiles manufacturing. Some diamond mines were affected and the retrenchments in the South African mines affected the banking industry as a whole.”
Snelgar said he was confident that the future of the bank was positive.
“The upswing will be positive growth going forward, though it will be a bit slow, and driven mainly by the corporate sector, and the infrastructural projects that will start later this year and the recoveries in the mining sector,” he said.
He said there was still some uncertainty within the textiles sector although there were signs that the United States’ economy which is the biggest importer of Lesotho textiles was recovering.
Snelgar said the banking market in Lesotho was small making it difficult for banks to register and maintain healthy profits.
“I think that profits will stay in the same region for the next two years,” he said.
He said there was also pressure on the pricing as customers are becoming more knowledgeable on the products.
He said they were therefore currently looking at inventing other products to cater for the changes in the market.
Snelgar said he saw opportunities in the proposed increases in capital expenditure by the government which will improve the performance of the corporate side of banking.
Standard Lesotho Bank however experienced a jump in credit impairments from nine percent in 2008 to 17 percent last year.
Snelgar said this was a sign of stress in the economy.
“(But) we are not worried about it as our credit loss ratio is at 1.2 percent which is not bad.
“We have not written bad debts that we have completely cancelled,” Snelgar said.
“We need to focus more on using new technology which will reduce our banking costs such as increased cell phone banking and electronic banking,” he added.
Snelgar sees positive economic growth of between two and three percent, and increasing to around five percent in 2011.
Standard Lesotho Bank is the largest bank in the country in terms of assets and coverage with total assets of M4.1 billion and serving about 200 000 customers.