The Botswana Building Society (BBS)’s provision of roof-tops to the emerging middle-class swelled its profits by nearly 100 percent as it looks forward to the mining sector driven economic boom.
The mortgageÔÇôlenderÔÇôcum-full fledged banking institution, which is enjoying the fruits of a robust transformation that started from 2004, attributed its performance to the caliber of its staff and products.
Full year profits to the end of March 31 this year were 88 percent up to P 58 million while its income ÔÇô cost- ratio was slashed aggressively from P 72 to 45 percent.
“Our profits this year were phenomenal. This can be attributed to the young and educated employees we have recruited. I am confidant that even going forward we will be able to achieve our set targets,” BBS Chief Executive Officer, Pius Molefhe, said, adding that the situation is being aided by the improved relations between the major shareholdersÔÇöincluding government.
However, the banking institutions said the mortgage demand has slowed down but they are crossing their fingers on the upcoming mining development in the northern parts of the country. Palapye, Francistown and Mahalapye are expected to have a windfall because of the mining activities taking place within their doorsteps. Gaborone is expected to be jerked up by DTC Botswana and Block 10.
“The banks are fighting to get their piece of the cake and are providing cheap funding. But, we are not afraid of that because we are a brand. Our turn around time is much better, our administration charges are the lowest compared to competition,” Molefhe said.
Molefhe, who took BBS as an ailing bank with profit of less than half a million in 2004, has built its assets to over P 1.3 billion within a period of three years.
“In 2004, we decided that we should take the institution to a higher level and profile. And that included a process of re-engineering, such as rationalization and the introduction of performance management system,” he added.
The transformation saw the bank’s controlling close to 70 percent of the residential mortgage market as it fights against the monied banking houses such as Barclays and Standard Chartered Bank.
The bank intends to open new branches in at least three places across the country in a bid to increase its footprint. Further, plans aimed at increasing its ATM facilities are already being considered to enhance its retail banking division.