While the dust seems to be settling at BBS Limited – a wannabe first indigenous commercial bank, its recent financials cannot be used to present a fair, in all material respects, the financial position of the banker. This is atleast according to a review note prepared by Ernst and Young Botswana (EYB) – a local unit of the international auditing firm Ernst & Young.
According to the auditors at EYB, the firm was tasked with conducting a review of the BBS Limited interim results for the period ending 30 June 2021. In carrying out its task, EYB made an early pick of the absence of the banker’s previous interim period financials, the omission which forced the auditors to question the interim results for the period ending 30 June 2021.
“The condensed interim financial statements do not include comparative information for the period ended 30 June 2020 as required by International Accounting Standard 34”, EYB said in a statement circulated amongst capital markets players.
EYB further stated that the omission of the comparative information is considered material and pervasive to the condensed interim financial statement as at and for the six months ended 30 June 2021.
In accounting world, a review of interim financial results consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.
EYB says financial results review is substantially less in scope as compared to an audit conducted in accordance with international auditing.
“Accordingly, we do not express an audit opinion”.
The EYB review opinion follows the BBS Limited’s release of its interim results this past week.
In response, BBS limited management says the results for the period ended 30 June 2020 were not published by the company due to delays experienced in the finalisation and issuance of the financial statements for the years ended 31 December 2018 and 31 December 2019.
“As Shareholders are aware, the Company’s audited financial statements for the year ended 31 December 2019 were finalised and issued on 18 December 2020. The delays in the finalisation of the Company’s financial statements were mainly as a result of technical issues experienced with respect to the implementation of the core banking system which impacted the accuracy”, reads part of the notes accompanying BBS Limited’s latest financials.
The deposit taker, which is planning to morph into a commercial bank, recorded a profit of P14.5 million for the period ended 30 June 2021 (December 2020: loss of P14.7 million).
The reviewed Condensed Interim Financial results also shows that the banker’s total assets exceeded total liabilities by P534 million. The bank’s liquid assets to deposits ratio stood at 14 percent (2020: 14.71%) at the reporting date which is above the regulatory threshold of 10 percent.
