Botswana Building Society (BBS), the mortgage-lender, defied hostile economic conditions in its full year results to March 31, 2012, but warned that it needs to change tact if it is to be a financial institution of choice going into the future.
The Society’s assets were bolstered by 14 percent to P 2.4 billion while profits for the year jumped up seven percent to P 68 million- compared to the prior year.
Operating income from lending and banking activities shot-up by 10 percent to P154 million over the year while Paid Up shares increased sluggishly by two percent to P 484 million. Paid Up shares and subscription shares were down nine percent over the year to P 484 million.
Savings deposit shot- up by a sterling P 140 million to P 480 million. But administration and operating expenses were up to P 86 million driven by projects aimed at positioning the Society for demutualization, according to its audited results.
However, it was quick to point out that it needs to demutualise as a matter of urgency so that it can diversify its income streams in a tightly competitive environment.
In its report it said it will be calling a Special General Meeting in the future to decide on the process of demutualisation.
“BBS is thus embracing a new set of strategic priorities which will build on established strengths, past and recent successes as well as emerging opportunities which can only be taken advantage of if we are a fully-fledged commercial bank,” the report said.
As part of the demutualisation process, the Society has already embarked on the upgrading of its technology platform aimed at ensuring that it delivers prompt and “effective customer service” by the time it becomes a commercial bank. This will include the introduction of cell-phone and internet banking to ensure that it competes head to head with its peers in the market. The demutualization process will push up the number of commercial banks to eight.
Further, it indicated that it has decided to increase its footprint across the country to ensure that most Batswana who are seeking mortgage loans are covered.
“To ensure that many Batswana access mortgage loans, we have increased the list of areas where we fund mortgages right across the country covering urban, semi-urban, major villages including smaller villages, especially those that borders major centres,” the report said.
The Society is also looking at ways of rolling out other product services into the market as it positions itself for stiffer competition in the commercial banking sphere.