Digital Banking and Financial Performance Review
Efficient Cost Management
• OPEX grew by 21.6% from #161.72bn in FY-2021 to 196.59bn in FY-2022 due to the impact of
rising inflation and exchange rate movement at both the official & parallel markets which
precipitated an increase in consumer price index (CPI).
.
OPEX growth of 21.6% was at par with headline inflation which closed at 21.34% in December
2022. Operating cost was significantly impacted by increased Regulatory Costs at the Bank
level-17.6% growth in Deposit Insurance Premium and 6.4% growth in AMCON Expenses.
42.8% growth in Interest Expense was primarily driven by the increase in Cost of Funds from
0.9% in FY-2021 to 1.28% in FY-2022 on account of demand for higher interest rates by
depositors, in view of rising inflation.
The Group made cost savings from the opportunity cost on the Interest saved on FCY
borrowings due to full repayment of the Group's FCY borrowings.
Overall, the Group was able to keep its Cost to Income Ratio (CIR) at a 48.03% level higher
than its guidance of 35%. The Group remains committed to effectively managing its cost in the
face of inflationary and revenue pressures in order to be within the guidance for FY 2023
guidance.
Cost to Income Ratio (CIR)
48.03
42.28
38.24
37.09
36.11
Dec-18
Dec-19
Dec-20
Dec-21
Dec-22
Overview of Expenses (#'Bn)
162.27
147.44
127.13
128.86
84.53
1.90
Dec-18
64.84
4.91
2.98
47.07
46.28
19.57
4.91
6.24
8.47
Dec-19
Dec-20
Interest Expense
Fee & Commission Expense
196.59
Operating Expenses (OPEX) (#'Bn)
36.07
9.16
33.40
37.60
5.01
37.28
2.11
126.35
2.11
93.54
78.68
68.88
36.861
66.10
2.09
7.06
17.63
22.69
13.16
8.53
11.99
Dec-18
Dec-19
Dec-21
Dec-22
Operating Expense
Loan Impairment
35.30
35.46
29.05
Dec-20
Dec-21
Dec-22
Depreciation and Amortization
Operating Lease Expenses/Right to use
Other Operating Expenses
Personnel Expense
22
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