Page 24 - Stanbic Bank IR 2024

22 LEADERSHIP INSIGHT | Chief Finance And Value Management Officer’s Report

Overview – Economic landscape

CHIEF Global economy – Growth expectations
remain uncertain
FINANCE AND The global economic outlook remains uncertain with varying
growth expectations across major economies. The outlook
VALUE is characterised by rising global trade frictions and shifting
economic policies under new governments. The global
economy is expected to show moderate growth at around
MANAGEMENT 3,3% in both 2025 and 2026 (World Economic Outlook),
broadly unchanged from the 2024 forecast. Emerging
markets are expected to grow faster than advanced
OFFICER’S economies, moderated by developed economies which are
expected to see slower growth. Globally, geopolitical
volatility remains a threat and the prevailing tensions are
REPORT expected to pose risks to global trade. Central Banks
continue to make decisions on interest rates to counter the
effects of these challenges, with a number of rate
adjustments expected to take place in some economies.
Realeboga Phoi Climate change is also expected to pose challenges, but
Chief Finance and Value economies are exploring mitigants which are expected to
Management Officer create a focus in renewable energy.

Local economic performance – Continued
Diamond sector pressures

Botswana’s political landscape remains stable, following a
peaceful transition of power in the October 2024 general
elections, setting an example globally. The Botswana
economy continues to experience strain as the region and
global economies at large go through waves of inflation and
disinflation. Botswana’s economy is expected to slow down
to 1% in 2024 (World Bank) mainly at the back of the
continued strain in the diamond mining sector, a contraction
from 2.7% in the comparative year. Weaker demand for
natural diamonds and the growing popularity of lab-grown
diamonds continue to put pressure on the economy. Though
there is a structural change in the global diamond market,
growth is expected to rebound in the medium term, driven
by the expected pickup in the global demand for diamonds
and the efforts undertaken to diversify the economy –
(World Bank). The need for economic diversification has
become paramount.

Strategic impact
We remain proud to report that the Letsema 2025 strategy,
in the second year of its three years, has proven effective in
multiple facets. Through our strong commitment to deliver
our strategy we have seen a culmination in accelerated
financial performance, as well as improvement in
efficiencies. This is trackable through growth in our
customer base (evidenced by balance sheet growth),
improved customer retention as well as improved staff
efficiencies, marked by an improved Cost-To-Income (CTI)
ratio, Cost Of Funding (COF) as well as Credit Loss Ratio
(CLR).

Following the organisational redesign in 2023, the Bank was
able to fill all vacancies and recorded an improved Net
Income before operating expenses of 25.3%. This
demonstrates the effectiveness of the exercise coupled with
our strong talent management program.
The Bank further revisited its client engagement frameworks
across the segments to ensure client solutions are well
informed. This is seen in the 18.6% growth in operating
expenses where investments in technologies as well as
process enhancement were employed to ensure
sustainability and consistency in client experience,
pain-points which have been highlighted by customers in
various feedback platforms continue to be solved.