Letshego profits soar past P1.1 billion

 

Pan African micro finance and banking group Letshego Holdings Limited has cashed big on the economic recovery across its markets.

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The Botswana home grown financial services giant operates in more that 10 African countries, but still remain rooted and domiciled in Botswana.

Last Thursday Letshego released its consolidated full year financial results for the period ended 31 December 2021.

The company achieved double digit performance growth for 2021, with profit before tax up 11% year-on-year to P1.147 billion, and Profit after tax climbing 16% for the same comparative period, to P730 million.

Asset quality remains strong with the Group’s Loan Loss Ratio (LLR) at -0.1% for the year, or 0.5% if we strip out once off deductions.

The Group’s Non-performing loans ratio increased marginally to 5.9% for the year (FY2020: 5.3%), reiterating stability in the Group’s credit and risk management framework.

Performance for the year was largely driven by 17% growth in net customer advances, totalling P11.9 billion. 2021 saw the commencement of Letshego’s second phase of its 6-2-5 strategic execution roadmap, entitled ‘Plan 2’.

The duration of this second phase, the customer phase is two years, and is characterised by focused investment into deepening the Group’s investment into differentiating digital and tech enhancements, spurring momentum in end-to-end automation of processes, systems and platforms, while securing strategic milestone in platforms and products that enable a step change in tangible value for new and potential customers.

In the first half of the year, Letshego went live with its LetsGo Digital Mall in 10 markets, following successful pilots in Botswana and Nigeria. The LetsGo Digital Mall is a unifying platform, increasing customer access across multiple channels including web, USSD, whatsapp and mobile.

The Digital Mall’s technical structure is built in such as way as to enable Letshego to build and evolve this platform towards its ambition of creating a Retail Technology company with an inclusive one-stop portal not only for Letshego products, Saving, payments, loans and lifestyle solutions, but also enabling access to everyday facilities such as mobile data and airtime, municipal service payments, all in a secured environment.

Net Interest Income saw a gradual increase of 6% year-on-year, and Non-funded income increased by 30% year-on-year, buoyed by momentum in new insurance offerings in select markets.

In line with the Group’s commitment to spurring focused investment, the Group’s operating expenses grew 13% year-on-year. Investment is expected to increase further in the final phase of Plan 2 for the 2022 financial year.

Within the Group’s lending value stream, Letshego achieved double digit growth in its Deduction at Source portfolio of 14% (FY2021: P10.5 billion). Profitability in Deduction at Source remains positive,
buoyed by digital and system enhancements.

The year saw slower growth in the Micro & Small Entrepreneur portfolio increasing in value by 7% to P859 million (FY 2020: P806 million).

The Mass Mobile Loans portfolio enjoyed stronger performance, with growth more than doubling in value to P568 million (FY 2020: P231 million).

Commenting on the financial results Letshego Group Chief Executive of Officer Andrew Okai said Letshego remains well capitalised at 35% capital adequacy ratio, and has a strong liquidity position to support future business growth.

“Letshego’s 2021 performance continued the trend of strong results, delivering double digit growth in both profit before and after tax. We are making exceptional
progress in transforming Letshego into a future-fit organisation that leverages digital, tech and end-to-end automation to unlock significant value, not only for our customers, but also for our investors and shareholders.The impact of our Strategic transformation journey is the creation and nurturing of a community of empowered people – the LetsGoNation – who have the skills and stature to lead and drive Africa’s future growth.” he said.

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