Monday, July 22, 2024

BBS profits up 9 percent defying recession

Botswana Building Society (BBS), one of the biggest mortgage banks in the land, shrugged of recession blues by posting big profits that will be the envy of other financial institutions.

The Bank recorded a jump in profits of 9 percent with its mortgage book jumping in a tight market where commercial banks are reluctant to lend because lending has become risky.

Pius Molefe, the Managing Director of the society, said in a statement accompanying the results that his outfit performed well because customer confidence in the products and services it offers remained generally positive in spite of the effects of the global economic crisis.

“The Society was able to continue attracting new customers in the 2009/10 financial year by introducing new products such as the Tlamelo Mortgage Savings Account for customers to be able to save towards the acquisition of property,” said the Bank on Friday.

The numbers for the financial year 2009/2010 showed that the Bank made a record profit of P72 million.

This is a 9 percent improvement from P66 million made in the same period for 2008/09.

Its mortgage book grew by 13 percent over the previous year, reflecting strong demand in the residential property market while arrears on mortgage loans reduced from 2 percent of the book last year to 1 percent in 2010.

“Because the consumer confidence was generally positive, BBS performance improved during the year under review as a result of the strength of our brand and actions taken by the Board and Management to meet ever changing customer demands and expectation,” added Molefe.

In answer to competition, in 2007 the Bank rebranded with tagline “We know you better” that wanted to take war to its competitors.

“Given the increasing number of competitions, increasing level of financial literacy, an increase in awareness of products and services offering and the rise in the cost of living,” said Molefe “we have found it necessary over the past 12 months to make some changes to our product mix as well as our pricing.”

Instead of the Bank having a uniform interest rate, it introduced flexible modes of interest rates to its customers to give then flexibility.

“The Bank has a strong balance sheet with good quality assets,” said Molefe.

The bank’s total assets are P1. 9 billion up from P1.8 billion recorded in the previous year.

“Our capital and liquidity positions remain strong and are compliant with the prudential requirements set out in the Building Societies Act,” he added.


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