Letshego will not declare a dividend after declaring a drop in profit from P71 million to P17 million. The company will instead preserve the capital to "safeguard future performance."
"While we still expect strong loan and income growth, driven by DAS and mobile loans, we acknowledge that we are not immune to the external operating environment, " the company said in its half year results."We still expect to see downside impact from expected credit losses for the remainder of this year, although tempered by effective collection efforts and cost optimisation."
Letshego, which currently holds over P1.7 billion in customer deposits and P13 billion in loans disbursed to customers, has seen a significant increase in its non-performing loan (NPL) portfolio which grew to 11% of its loan book from 8% in 2023. The company blamed macro-economic conditions and environmental risks in some markets which posed collection challenges.
Net credit impairment charges were P333 million from P221 million the previous year, a 34% increase, driven by the higher-than-anticipated delinquencies in test and learn programs (Individual lending in Botswana and Mobile Loans in Kenya).