Botswana Building Society (BBS) has upped its game and refined operations as part of its preparatory work to convert the society into a commercial bank. BBS Managing Director (MD) Pius Molefe told The Telegraph in an interview that the bank has observed that some of its competitors are changing while others are improving their businesses.
“With change everywhere, BBS cannot afford to be left behind. We are focused on becoming one of the leading home grown commercial banks to everyone we serve: customers, shareholders and many other stakeholders,” said Molefe.
He stated that at the same time, they want to remain true to the purpose of offering excellent customer service. A look into BBSis financial statements for the year ended 31 March 2015 shows that the bank’s total mortgages and advances, at P3.010 billion, make up 86 percent of the total assets of the society. Long term loans grew by 16 percent to reach P2.934 billion in March 2015 compared to P2.526 billion in March 2014. At P809.145 million, BBS’s indefinite period shares were 11 percent higher than last year’s amount of P726.712 million. Fixed period paid up shares increased by P12.731 million or thee percent from a balance of P426.982 million recorded in March 2014 while subscription shares increased by P2.399 million to P58.972 million as at the end of March 2015.
“The growth in our various shares portfolios compared to the reduction in short loans, which are taken against such shares highlights the fact that shareholders were particularly keen on saving rather than using the shares as collateral for loans or in redeeming such shares,” said Molefe.
He further said savings accounts balances increased by 10 percent or P52.972 million from P528.111 million in March 2014 to P581.083 million in March 2015 while fixed deposits recorded a significant growth of P326.815 million to reach a balance of P445.369 million.
Board Chairman Cross Kgosidiile revealed in the financial report that the project to convert BBS into a commercial bank is on track.
“There have been a lot of significant developments in this regard. We have since completed the business plan for the envisaged bank and I am confident that it will be a welcome addition to the market,” Kgosidiile stated.
He also revealed that an application to become a company will also be lodged with the Registrar of Companies as it is a crucial step to becoming a bank in that the business must first change from the status of a building society.
“We will submit the actual application for a banking license with the Bank of Botswana during the month of October 2015. We have been advised that feedback from the Bank of Botswana on the banking license application takes up to six months. At the maximum, BBS should receive a response on the application in March 2016,” he said.
“Clearly, these time lines attest to the proximity of realizing the BBS dream to become a fully-fledged bank. In the meantime, we will continue to engage with shareholders and other stakeholders on the demutualisation process.”
He also expressed confidence in the long term growth prospects of BBS which will further be enhanced by commercialising the business.