Standard Chartered Bank Botswana : 2022 ANNUAL REPORT

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About this Report

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2022 Annual Report

Living the brand promise… Here for good

2022 Annual Report

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A Message From Board Chairperson

2022 Annual Report

"...Our continued focus on the implementation of our Digitisation strategy has resulted in continued sustainable gains with our operating income growing 22% and the cost-to- income ratio down from 89% to 67% for the year..."

Doreen C. Khama

The year 2022 started with optimism as most of the world came out of the COVID -19 pandemic lockdowns and most businesses returned to the normalcy of working from the office. We held our first face to face Board meeting which provided an opportunity for some of my fellow Directors who were appointed during the pandemic to finally meet. Despite the geopolitical unrest in Ukraine and Kenya which had a telling impact on global economies and international trade, the Bank delivered a strong financial performance underpinned by our core principles, "Never Settle" Do the Right Thing" and "Better Together" which are the cornerstone of all of our activities.

Economic Update

Botswana's economy has continued to recover from the COVID -19 pandemic in 2022. Inflation remained elevated due to geo-political tensions, it increased sharply to a decade-high of 12.2% in 2022 (from 6.7% in 2021) triggered by an upward adjustment of administered prices, a modest recovery in domestic demand, and higher international food and fuel prices emanating from supply chain shocks. Real Domestic Product (GDP) grew by 5.8%, roughly half the growth rate achieved in 2021, the key drivers of growth were Water

• Electricity and Diamond Trades which reported an annual growth of more than 20%. Positively, all other sectors reported a growth in 2022, even those that contracted in 2021 such as Agriculture.

Bank of Botswana tightened monetary policy in 2022, raising the newly introduced Monetary Policy Rate by a cumulative 151 basis points. It projects inflation to fall between the 3-6% objective range by the second quarter of 2024.

Performance

Our prior years' performance is testament to the hard work and commitment to strategy by the management and employees of the Bank, which penultimately saw the Bank's income increase year on year by 22%. The positive performance signified a continuing resuscitation of the countries' economy and the Banks performance. The Bank reported a profit before tax of P253 million representing a 229% year on year increase. Our focus on the implementation of our Digitisation strategy has resulted in continued sustainable gains with our operating income growing 22% and the cost-to-income ratio down from 89% to 67% for the year. It is important to note that the delivery of our strategy, results in us delivering value to our shareholder, and this is evidenced by an increase in the banks share price.

People & Culture

Globally we all emerged from what was a difficult and uncertain period, and as the year drew to a close, we remembered and commemorated our fallen colleagues and those colleagues who lost loved ones during the turmoil of the pandemic. One of the strategic pillars for 2022 was ensuring that our Employees well-being was placed at the centre of the strategy. The bank introduced specific programmes to improve the working culture, with a focus on remuneration as well as ensuring that we achieve a balance between work, wellness and home. Employee engagement was also intensified as the entire workforce came back to the office.

Outlook & Strategy

As you will see, our results are proof that the Bank's strategy is bearing the desired results for the shareholder, our employees, and importantly, our clients. We are always exploring avenues of giving our stakeholders a better experience of our services. 2023 will see us working harder to truly unleash the full potential of the franchise as we seek to improve our efficiencies and continue to build on the great work started in 2022, all this with a view, to better serve our partners.

As we look towards 2023, I assure you that we have the right mix of skills and experience in our Board, Management team and the employees, who will continue to lead the Bank forward. We will continue to be deliberate in our actions as we drive to not only grow the business, but to also ensure that we impact our employees and the communities we operate in. Being "Here for good" is not just a brand statement, but a statement of our intent to always do good, treat our customers fairly and ensure that we carry out our responsibilities to our stakeholders with dedication and a firm commitment to serve you!

Doreen C. Khama

Board Chairperson

Chief Executive

Officer's Report

Economic Update Performance

"...Our aspiration is to cultivate a purpose-led workforce that is ambitious and committed to delivering the strategic intent of the Bank...."

Mpho Masupe

2022 Annual Report

Key Financial highlights

made in digital/technology platforms that enable our employees to learn on the go, better manage their teams, collaborate more and ultimately serve our clients better.

To maintain good conduct and raise awareness of our valued behaviours, on a quarterly basis, we rewarded staff who role modelled the right behaviours. Re-defining our culture will continue to be key in ensuring that the Bank is recognized as the best place to work for current & future talent and the best place to Bank.

Our aspiration is to cultivate a purpose- led workforce that is ambitious and committed to delivering the strategic intent of the Bank.

Financial Performance

The Bank recorded a strong Profit Before Tax of P253 million, this is as a result of a well-executed and effective strategy. We remain relentless in our quest to continuously deliver value to our shareholders, and this is reflected by the following key metrics; ROE of 17%, in line with our target of delivering double digit returns, operating expenses decreased 8% due to prudent cost management measures employed by the Bank over the past 3 years.

The results show our continued commitment to our strategy, and our purpose to drive commerce and prosperity with our unique diversity.

Outlook

Standard Chartered Bank Botswana is the first and currently only global Bank serving in this market. Our experience of over 125 years in Botswana, speaks to our ability to remain relevant and evolve over time to meet the needs of our clients and shareholders.

Our ability to remain resilient, both globally and at home, have seen us successfully navigate through the multiple upheavals that have affected our operating environment.

Most recently, we have undergone

tremendous pressure through the COVID - 19 pandemic, which devastated the global economy, this, coupled with elevated inflations which were exacerbated by geo-political tensions made for a challenging operating environment. Despite these, the Bank has remained resilient and has made good progress and is on track to deliver and surpass the strategy it launched in 2020.

As we make significant strides with our digital strategy, we recently launched Agent Banking which allows us to deliver holistic everyday banking solutions to a larger population. In the year 2023, we will continue to invest in partnerships and innovation as these are instrumental to our business, enabling us to increase our reach and relevance to serve clients in a meaningful way.

We are optimistic about 2023, largely based on the sound fundamentals that we have in place for sustainable business growth.

Moreover, given the encouraging macroeconomic fundamentals and stable outlook, we are confident that these positive sentiments will translate into growth within the economy and thus giving us an opportunity to pursue business and deliver value to our shareholders.

Our Brand promise - Here for good, is a commitment that we have made over the years, one which lies at the very core of what we do, as we serve our employees, clients, partners, communities, and shareholders.

Here for good holds us accountable to how we show up, as we focus on creating value for our stakeholders and even as we aim to maximise returns for our shareholders.

Our evolution is guided by our clients, who remain at the centre of what we do. We look forward to serving this nation and our valued clients for another 125years, as we continue to leverage our global reach and local expertise for the benefit of all.

Mpho Masupe

Chief Executive Officer

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