Annual financial statements | Shareholder information |
Absa Bank Botswana Limited
Integrated Report 2022
Report 2022 | i |
Readingi thisthisreportreport AbsaAbsa--brave,brave, passionate andreadyready EEmpowering Africa'sfrica'stomorrowtomo row--ourourstrategicstrategicintentintentTogetherTogether...one...onestorystoryat aattimea time-delivering-delveringvaluevalue
Protecting value through strong governance | Annual financial | statements | Shareholder information | |||
Our 2022 Integrated Report
Absa - brave, passionate and ready
Absa at a glance | 6 |
Ways to do banking | 8 |
Structure, products and services | 10 |
Absa bank in the Botswana banking context | 12 |
Empowering Africa's tomorrow
Board Chairman's report | 16 |
Our purpose | 18 |
Strategic overview | 19 |
Our business model | 24 |
Our external environment | 27 |
Our stakeholders' needs and expectations | 30 |
Material matters | 36 |
Together...one story at a time - delivering value
Managing Director's report | 50 |
Finance Director's report | 54 |
Diversify revenue streams | 58 |
A primary partner for our clients | 60 |
A digitally powered business | 62 |
A winning, talented and diverse team | 64 |
An active force for good in everything we do | 67 |
Outlook | 70 |
Protecting value through strong governance
Our leadership | |
Board profiles | 76 |
Country management committee profiles | 81 |
Board role, structure and composition | 88 |
Board objectives | 90 |
Board independence and tenure | 90 |
Board changes | 90 |
Board meetings | 90 |
King IV application | 92 |
Board evaluation and effectiveness | 96 |
Board skills and training | 96 |
Board Governance Outlook | 97 |
Board committees' reports | 98 |
Remuneration report | 102 |
Management committees and code of ethics | 105 |
Annual financial statements
Directors' responsibilities and approval | 110 |
Corporate governance report | 111 |
Director's report | 112 |
Independent auditor's report | 114 |
Statements of comprehensive income | 120 |
Statements of financial position | 121 |
Statements of changes in equity | 122 |
Statements of cash flows | 124 |
Summary of accounting policies | 125 |
Notes to the annual financial statements | 142 |
Shareholder information | |
Notice to shareholders | 218 |
Annexure to notice | 219 |
Proxy | 221 |
Integrated reporting purpose, scope and audience
Absa Bank Botswana Limited ("the Bank") is a public company listed on the Botswana Stock Exchange ("BSE") and domiciled in Botswana. The Bank strives to incorporate the principle of integrated thinking into our business and reporting. This Integrated Report is aimed at various key stakeholders, including our investors.
Integrated thinking requires integrating considerations around prosperity, people and the planet into our core business activities considering our external environment, and taking a holistic view of factors that create or erode enterprise value. Considering the Bank's reliance on a wide range of tangible and intangible resources, integrated thinking is critical to ensure cohesive decision- making and responsible capital allocation. Ultimately, integrated thinking helps us balance short- and long-term outcomes, which is fundamental to our ability to create value sustainably over time.
This Integrated Report thus aims to provide our stakeholders with a concise and informed view of the Bank's strategy, business model, corporate governance, performance and prospects in the context of our operating environment, reporting on how we create and preserve value throughout our business over the short, medium and long term.
The financial information reporting boundary is defined by control and significant influence in the operating environment. All other reporting boundaries, including risks, strategy, governance, social and environmental are as per their ability to significantly impact value creation, as determined by the Bank's management and Board.
Frameworks, assurance and reporting suite
Our report is based on the Integrated Reporting () Framework 2021*. The contents of this report include extracts of financial information based on International Financial Reporting Standards ("IFRS") and non-financial information reviewed by management. The Annual Financial Statements ("AFS") published in the report are prepared in accordance with the recognition and measurement requirements of IFRS interpretations issued by the IFRS Interpretations Committee ("IFRS-IC"), Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council. The AFS are also in compliance with the Botswana Stock Exchange Listings Requirements, the Botswana Companies Act of 2007 as amended (Cap 42:02), the Financial Reporting Act of 2020 through the Botswana Accountancy Oversight Authority, the Non-Banking Financial Institutions Regulatory Authority Act (Cap 46:08), and the Banking Act (Cap 46:04).- https://www.ifrs.org/issued-standards/ir-framework/
1 Less than 12 months.
2 One to three years.
3 Longer than three years.
Reporting period and forward- looking statements
This report covers the period from 1 January 2022 to 31 December 2022. Notable and/or material events after this date and until the approval of this report on 5 June 2023 are included. Statements relating to future operations and the performance of the Bank are not guarantees of future operating, financial or other results and involve uncertainty as they are based on assumptions of future developments, some of which are beyond our control. Therefore, the results and outcomes may differ. Given continued levels of uncertainty. Our approaches, planning, and stress testing exhibit a higher than usual level of uncertainty as to the outlook statement.
Process disclosure, materiality and assurance approach
This Integrated Report uses dynamic materiality to scope which matters are significant for reporting and servicing the informational needs of capital markets. A matter is material if it can significantly affect our ability to create or preserve value or lead to value erosion (i.e., enterprise value) over the short1 , medium2 and long term3 . Our material matters as determined through our materiality determination process are:
Our Integrated Report process commenced with the review of the material matters for reporting. The materiality determination process for the purpose of preparing and presenting an integrated report involves:
- Identifying relevant matters based on their ability to affect value creation
- Evaluating the importance of relevant matters based on either the magnitude of their effect on value creation or the likelihood of occurrence
- Prioritising the matters based on magnitude
- Determining the information to disclose about material matters.
Material matters reported on in this report thus cover those matters deemed to have a material impact on the business in the short1, medium2 and long term3. This was primarily determined via a joint in-depth strategy review, in which the Bank's Board of Directors ("the Board") was actively engaged, after which the Board approved the 2022 strategy on 8 December 2021. Thereafter, content gathering for these disclosures included engagements with and submissions from business units, including governance and enabling functions. In accordance with this materiality principle, each submission in this report was signed off by the accountable function executive, after which the holistic report was signed off by the Country Management Committee (CMC). The Bank applies a risk-based, combined assurance approach over operations. Our assurance model therefore, which comprises of internal controls, risk reviews, management assurance, compliance monitoring and conformance reviews, the internal audit function and the services of independent external assurance providers, support the accuracy of the disclosures within this report.
In line with their respective mandates, specific reports are reviewed and recommended to the Board for approval by various committees of the Board.
ii | Absa Bank Botswana Limited Integrated Report 2022 |
Absa Bank Botswana Limited Integrated Report 2022 | 1 |
Reading this report Absa - brave, passionate and ready Empowering Africa's tomorrow - our strategic intent Together...one story at a time-delivering value
Approval of the Integrated Report
Protecting value | through | strong governance | Annual financial statements | Shareholder information | ||
Navigational icons used in this report
Hyperlinks are used throughout this report and is indicated through the use of red italic text
Supported by management and all the Board Committees, the Board acknowledges its responsibility for the integrity of the Bank's external reporting. This report provides material and relevant information to providers of financial capital to enable informed capital allocation decisions while also supplying information relevant to broader stakeholders.
This report is presented in accordance with the International Integrated Reporting Framework (2021). The Board believes it addresses all material matters influencing the Bank's ability to create, preserve, or erode value, in the short, medium, and long term. It is the Board's opinion that this Integrated Report presents a fair and balanced view of the Bank's performance and outlook.The Board approved this report on 5 June 2023.
Daniel Neo Moroka | Cosmas Moapare | Kgotlayarona Ramaphane | Sari Helena Nikka |
(Board Chairman) | (Lead Independent | (Independent Non-Executive | (Independent Non- |
Integrated thinking principle We sign post where integrated thinking and decision making are at play to create the basis for long-term value creation.
King IV statement We sign post statements by those charged with governance in line with King IV disclosure practices.
King IV Report on Corporate Governance™ for South Africa, 2016 (King IV). Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all of its rights are reserved.
Six capitals We consider all six capitals in assessing value creation, preservation and erosion. These icons sign post the relevant capitals.
Description of Capitals
Human capital
Human capital
Human capital refers to the competencies and capabilities of our people and the contribution they make in aligning with our purpose and strategic direction. Our ambition is to create a thriving, future-fit organisation that attracts, develops, and retains the best people through a differentiated workplace experience that brings their possibilities to life and offers competitive compensation. Our culture journey is one of becoming customer- obsessed, acknowledging the strength of our people, and delivering results sustainably - with an African heartbeat. Under the banner #iamAbsa, our culture transformation initiatives enable organisation-wide shifts toward the desired mindsets and behaviours that entrench our purpose and nurture a culture of
Non-Executive Director) | Director) | Executive Director) |
Benjamin Monaheng | Sethunya Makepe-Garebatho | Thabo Kagiso Matthews | Saviour Mwepu Chibiya |
Kodisang | (Independent Non-Executive | (Independent Non- | (Non-Executive Director) |
(Independent Non- | Director) | Executive Director) | |
Executive Director) |
Keabetswe Agatha | Cynthia Morapedi |
Pheko-Moshagane | (Finance Director) |
(Managing Director) |
Financial
capital
Intellectual
capital
Manufactured
capital
Financial capital
Financial capital refers to the pool of funds available to the Bank to enable our business activities. This capital can be obtained through various means, including financing, equity, or generated through operations or investments. We seek to use our financial stocks of value to enhance the outcomes on all our capitals in order to support our ability to create value over the short, medium and long term while preventing value erosion.
Intellectual capital
Intellectual capital refers to our intellectual property and organisational capital, including tacit knowledge, systems, procedures, and protocols. Our ability as a Bank to innovate in order to meet pressing and future needs is also considered part of our intellectual capital.
Manufactured capital
Our Group IT infrastructure is the most material part of our manufactured capital, taking our strategic direction and evolving business model into consideration. While our buildings and other manufactured capital provide necessary inputs,
Social and
Relationship
capital
Natural capital
ownership, belonging, participation and inclusion.
Social and relationship capital
Sound relationships with our stakeholders are vital to value creation and preservation. These serve as valuable capital in both good and challenging times. Social and relationship capital refers to the relationships we have with our stakeholders. These connections link the institutions and relationships within and between our communities, stakeholder groups and other networks.
These relationships form the lifeblood of our business, supporting sustainable value creation and preservation.
Natural capital
Natural capital refers to all renewable and non-renewable natural resources and processes that enable our business activities, thereby supporting our ability to create value in the short, medium, and long term. Included in our assessment of our natural capital is our aim to improve the manner in which we consume natural capital over time.
Share your views
We remain committed to empowering Africa's tomorrow, together...one story at a time. The Bank has adopted an integrated approach to reporting, in accordance with various corporate governance rules and standards, and this is our second integrated report. Please share your feedback on our report by emailing Botswana.CustomerService@absa.africa.
the detail of these aspects of our manufactured capital are not detailed in this report.
Sustainable Development Goals
(SDGs) Absa Group's prioritised SDGs.
2 | Absa Bank Botswana Limited Integrated Report 2022 |
Absa Bank Botswana Limited Integrated Report 2022 | 3 |
Reading this report Absa - brave, passionate and ready Empowering Africa's tomorrow - our strategic intent Together...one story at a time-delivering value | Protecting value | through | strong governance Annual financial statements Shareholder information |
Absa - brave, passionate and ready
Absa at a glance | 6 |
Ways to do banking | 8 |
Our structure, products and services | 10 |
Absa bank in the Botswana banking | |
context | 12 |
4 | Absa Bank Botswana Limited Integrated Report 2022 | Absa Bank Botswana Limited Integrated Report 2022 | 5 |
Reading this report Absa - brave, passionate and ready Empowering Africa's tomorrow - our strategic intent Together...one story at a time-delivering value
Protecting value | through | strong governance | Annual financial statements | Shareholder information | ||
Absa at a glance
Absa Bank Botswana Limited applies integrated thinking and through this integrated report share our value creation story with our stakeholders.
Absa at a glance
Absa Bank Botswana Limited is listed on the Botswana Stock Exchange and is one of Botswana's leading financial institutions.
Abbreviations
ABB | Absa Bank Botswana Limited |
AFS | Annual Financial Statements |
AGM | Annual General Meeting |
AI | Artificial Intelligence |
AIS | Absa Insurance Services (Pty) Ltd |
KYC | Know Your Customer |
KPIs | Key Performance Indicators |
LAR | Liquid Asset Ratio |
mn | Million |
NBFI | Non-bank financial institutions |
Our purpose
Empowering Africa's tomorrow, together …one story at a time
Our values
We drive high performance to achieve sustainable results
Our employees are our strength We are obsessed with the customer We have an African heartbeat
Advancing our digitally-led
business strategy.
P22.7 billion | P17.0 billion |
balance sheet size | deposits due to |
(2021: P21.5 billion) | customers |
(2021: P16.4 billion) |
22%
Capital adequacy ratio
(2021: 18%)
ARO | Absa Regional Operations |
ATM | Automatic Teller Machine |
ASB | Absa Securities Botswana (Pty) Ltd |
BOB | Bank of Botswana |
BWP | Botswana Pula |
bn | Billion |
CAF | Commercial Assets finance |
CAR | Capital Adequacy Ratio |
CASA | Current Accounts Savings Accounts |
CET1 | Common Equity Tier 1 Ratio |
CIB | Corporate and Investment Banking |
CMC | Country Management Committee |
CSI | Corporate Social Investment |
DR | Discount Rate |
DVaR | Daily value at risk |
ECL | Expected credit losses |
EDs | Executive Directors |
EFTs | Electronic Fund Transfers |
ERMF | Enterprise Risk Management Framework |
ERTP | Economic Recovery and Transformation Plan |
ESG | Environmental, Social and Governance |
ESD | Enterprise Supply Chain and Development |
FATF | Financial Action Task Force |
FIA | Financial Intelligence Agency |
NBFIRA | Non-Bank Financial Institutions Regulatory |
Authority | |
NED | Non-Executive Director |
NFI | Non funded Income |
NII | Net Interest Income |
NPS | Net Promoter Score |
PoS | Point of Sale |
PPE | Personal Protective Equipment |
PPPs | Public-Private Partnerships |
RBB | Retail and Business Banking |
RWA | Risk Weighted Assets |
SACU | Southern African Customs Union |
SADC | Southern African Development Community |
SDGs | Sustainable Development Goals |
SME | Small Medium Enterprise |
SOCE | Statement of Changes in Equity |
SOCF | Statement of Cash Flows |
SOCI | Statement of Comprehensive Income |
SOFP | Statement of Financial Position |
SPPI | Solely payments of principal and interest |
STEM | Science, Technology, Engineering and Mathematics |
TAG | Technical Accounting Group |
TCFD | Task Force on Climate-related Financial Disclosures |
UK | United Kingdom |
Awards and notable achievements
32 branches
114 ATMs
1 027 employees
4 810 point-of- sale (PoS) devices
FX | Foreign Exchange |
GACC | Group Audit and Compliance Committee |
GBP | Great British Pound |
GDP | Gross Domestic Product |
IAS | International Accounting Standards |
ICT | Information Communications Technology |
IESBA | International Ethics Standards Board for |
Accountants' Code of Ethics for Professional | |
Accountants | |
IFC | International Finance Corporation |
IFRS | International Financial Reporting Standards |
IMF | International Monetary Fund |
INED | Independent Non Executive Director |
IR | Integrated Reporting |
UNESCO | The United Nations Educational Scientific and |
Cultural Organisation | |
USA | United States of America |
USD | United States of America Dollar |
VAT | Value-Added Tax |
VRF | Value Reporting Foundation's |
ZAR | South African Rand |
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Absa Bank Botswana Limited Integrated Report 2022 | 7 |
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ABSA Bank Botswana Ltd. published this content on 08 June 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 June 2023 14:15:09 UTC.