BoB confirms NDB’s failure to submit audited results

NDB chief links the delay to new core banking system
Bank likely to report subdued financial performance
Bank’s privatisation still in the pipeline
The central bank, Bank of Botswana confirmed Monday that the government owned National Development Bank (NDB) failed to submit its set of audited financial results for the year ending March 2014 within the stipulated time. BoB Monetary and Financial stability director, Dr Kealeboga Masalila says when questioned on the delay, NDB linked its failure to submit the results, to a new core banking system and asked to be given an extension of a couple of more months. The bank is said to have recently bought and installed a P30 million core banking system which is at the centre of the bank’s poor performance during the financial year that ended March 2014. This week, NDB’s Chief Executive Lorato Morapedi confirmed the delay in the release of the audited results to Sunday Standard. “Completion of this audit was delayed mainly due to the migration to the new integrated Banking System which required a detailed audit between the old system and the new system impacting on time lines for production of the March 2014 financial results.”At the same time, Morapedi confirmed that the bank’s financials, which are likely to be released this coming week will show a lower than expected financial performance result. However she says despite the expected subdued performance, the bank remains strong as indicated by an increase in asset base at 11.6 percent (P1.58 Billion compared to P1.4 Billion in March 2013), while loans and advances increased by 9.81 percent (P1.3 billion compared to P1.2 billion in March 2013).
“In the midst of the tough economic environment in which the bank is operating, characterised by a squeezed interest rate environment, the bank continues to focus on the execution of its core development and citizen empowerment mandate,” said Morapedi. The bank’s financials are expected to show interest income increased by 8 percent from P202million in 2013 to P218 million. Operating expenses increased by only 4 percent which is indicative of the bank’s efforts to manage costs in an environment of increasing administration costs.
Morapedi pointed out that the bank continues to support start-up businesses as well as agricultural projects, which are periodically affected by drought and livestock diseases. She added that this significantly contributed to a sharp rise in impairments allowance, which mainly led to the bank recording an operational loss amounting P86.4 million.“Internally we did the bank’s structure realignment, and we have introduced relationship managers who are also sector based. The bank is responding to customers’ needs,” said Morapedi. The bank says it implemented some major projects during the 2013-14 financial year which required significant cash outflows. According to Morapedi the projects included the procurement and installation of the new integrated banking system mentioned above, branch office refurbishment, rebranding exercise and the organisational structure realignment exercise, which were all necessary as the bank now embarked on a major transformation exercise which will see the national asset transformed into a fully-fledged commercialised and privatised entity.