Swazi Observer

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SBC LENDING BUSINESS RECORDS 10% PROFIT HIKE

By KWANELE DHLADHLA | 2020-09-30

SBC Limited consumer lending business, despite very challenging trading conditions posted a 10 per cent increase in profits after tax.

In spite of a 10 per cent increase in profit after tax in the SBC consumer lending business to E26.7 million (2019: E24.2m), profit before tax declined by 21.4 per cent to E21.1 million (2019: E26.9m) as a result of the carrying costs of the property segment which at this point is achieving fledgling rental revenues.

In a period significantly impacted by on lockdown restrictions necessitated by the COVID-19 pandemic, SBC’s disbursements amount to E135 million (2019: E215 million) for the six month period ended June 30, 2020. Consumer lending revenue grew by seven per cent to E152 million from E142 million in 2019.

The SBC Limited Group (SBC) continues to provide financial solutions to their customer base in both Lesotho, under the Lesana brand and Eswatini trading as Select.

The value proposition targets potential customers, on a salary deduction basis that traditionally have not been supported by the local banking industry and are primarily employed by the state; typically this includes police, nurses and school teachers.

Unfortunately, with the increase in property costs and the challenge with new rental opportunities due to the COVID-19 lockdown, profit after tax for the SBC Group declined to E15.8 million.

The financial results reflect that of a resilient well diversified underlying franchise, negatively impacted by a very difficult environment in the jurisdictions they operate in, namely Lesotho and Eswatini.

It should be mentioned that the first half of 2020 was dominated by the COVID-19 pandemic and the distressing human and economic cost.

“During this time SBC has remained steadfast in support of all our clients, our employees and the communities in the countries in which we operate.

“With the group’s strong capital and liquidity positions going into this crisis, we have ensured that we continue to maintain staff employment levels and in addition, continue to lend and provide loans to both existing and new clients,” read the financials commentary in part.

SBC emphasised that housing remains a key focus area for the group and they expect to see an improvement in new rentals once COVID-19 restrictions get lifted in the foreseeable future.

“The general sentiment from the market, prior to the lockdown, was very positive and we expect the momentum of the uptake of these units to improve. The construction of the next 93 units will be completed by end of September 2020 and the new retail offering opened in early June 2020,” it was disclosed.

In Eswatini, the Malkerns Square project, a local housing and retail development, augments the business offering by providing residential rental and retail opportunities to prospective tenants.

The second phase of the residential offering which will be completed by end of September 2020 incorporates an additional 93 apartments available for rental.

The retail centre, including a KFC fast food outlet which opened in June 2020 with notable tenants that include a supermarket franchise (Pick ’n Pay), a liquor store and coffee shop complement the residential offering.

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