Monday, July 22, 2024

BBS looks forward to clinching banking licence in 2021

Following the conclusion of an audit of its 2019 financial statements, aspiring home grown commercial banker – BBS Limited says it will re-submit its application for a banking license with the regulator – Bank of Botswana. 

The reapplication for the commercial bank license comes after the initial application made in December 2018 was voluntarily withdrawn in October 2019 due to the banker’s delay to release its financial statements. The securities of the company were also suspended from trading at the Botswana Stock Exchange (BSE) for the same reason. 

This week after publishing the financials in question, the BSE quoted banker told the markets that its application record has since been updated accordingly and that all things being equal the bank expect to have received a response from the industry regulator by the middle of 2021. 

“In the meantime, we are readying ourselves to operate commercially by putting in place all the necessary operational and human capital requirements.” – BBS Limited Chief Executive – Pius Molefe.

Meanwhile the bank’s latest financials shows that it made a loss of P35.761 million during the year under review compared to a loss of P26.191 for the 9-month period to December 2018. The banker’s total savings and deposits grew by 33 percent from a balance of P2.170 billion as at 31 December 2018 to P2.885 billion as at 31 December 2019. 

At the same time, during the period under review the banker experienced an increase in non-performing loans as some of their customers defaulted on their loan repayments due to loss of income and/or loss of jobs largely associated with mine closures and retrenchment by some companies.

Molefe said that despite the loss, other performance indicators show that BBS Limited is still a strong business that is highly regarded in the market.

Furthermore, Molefe said BBS Limited’s capital base remains strong as signaled by the capital adequacy ratio which stood at 24.50 percent as at December 2019.

He said, the non-performing loans ratio increased from 9 percent to 10 percent as at the end of December 2019.

“Through our operational risk management framework, we took several reasoned steps to protect the business from the shocks of COVID-19. One of them was reducing mortgage funding limits for various geographical areas,” he stated.


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