Wednesday, December 8, 2021

BBSL granted a provisional commercial banking licence

Commercial banker to be – BBS Limited has announced that the central bank has issued it with a provisional commercial banking licence.

The issuance, according to the mortgage lending leader, was done after the central bank concluded that BBSL satisfies primary licensing requirements as stipulated in the Banking Act (Cap. 46:04).

“The approval is subject to conditions which BBSL is required to address before a full banking license is granted by Bank of Botswana,” reads part of a communiqué circulated to shareholders, customers, depositors and other stakeholders via BSE website.

BSS Limited Managing Director said that the bank is confident that the matters noted by the central bank for resolution are not insurmountable.

“Both the Board and Management are working very hard to ensure that the issues are dealt with to the satisfaction of Bank of Botswana in the shortest time possible. This exciting development means that BBSL will become the first indigenous financial institution to operate as a commercial bank since Botswana attained independence 55 years ago,” Molefe said.

While the dust seems to be settling at BBS Limited – a wannabe first indigenous commercial bank, its recent financials cannot be used to present a fair, in all material respects, the financial position of the banker. This is atleast according to a recent review note prepared by Ernst and Young Botswana (EYB) – a local unit of the international auditing firm Ernst & Young.

According to the auditors at EYB, the firm was tasked with conducting a review of the BBS Limited interim results for the period ending 30 June 2021. In carrying out its task, EYB made an early pick of the absence of the banker’s previous interim period financials, the omission which forced the auditors to question the interim results for the period ending 30 June 2021.

“The condensed interim financial statements do not include comparative information for the period ended 30 June 2020 as required by International Accounting Standard 34,” EYB said in a statement circulated amongst capital markets players.

EYB further stated that the omission of the comparative information is considered material and pervasive to the condensed interim financial statement as at and for the six months ended 30 June 2021.

In accounting world, a review of interim financial results consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

EYB says financial results review is substantially less in scope as compared to an audit conducted in accordance with international auditing.

“Accordingly, we do not express an audit opinion”.

The EYB review opinion follows the BBS Limited’s release of its interim results this past week.

In response, BBS limited management said the results for the period ended 30 June 2020 were not published by the company due to delays experienced in the finalisation and issuance of the financial statements for the years ended 31 December 2018 and 31 December 2019.

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