Botswana Building Society (BBS), the biggest mortgage lender in the country, reported a 13 percent rise in profits in the first six months of the year, to end of September, driven by pent-up demand for home-ownership during the period.
The loan book went up by 21 percent to P 1.3 billion from P 1.1 billion during the comparable period in the yesteryear, making it the preferred source of home-ownership lending in the country.
The Society, whose total assets increased significantly year-on-year from P1.5 billion to P 1.8 billion is trying to navigate ways of becoming a fully-fledged commercial bank but that can only take place if there is a review of the Act that established it. The move will put it on the same line with Halifax of the United Kingdom.
“The Society earned a profit of P 35.7 million in the six months of the financial year. The profit earned was 13 percent higher than the profit for the same period previous year. The growth in profitability was a result of a 21 percent increase in advances over the previous year,” Managing Director of BBS, Pius Molefe, said in a statement.
Further, Molefe remained optimistic about the future performance of the Society during the second half of the year that will be partly attributed to the possible slow-down in the inflation rates.
Inflation has been in the double digit for the best part of the first half of the year and only retreated by midyear giving the central bank the courage to ease the bank lending rate at 11 percent.
“The Society continues to have strong capital base. The capital adequacy ratio as at 30 September 2009 was 57.33 percent. The Society also complied with liquidity requirements as required by Building Society Act,” he said.
The Society prides itself of being an indigenous financial institution with the aim of positively contributing to the development of the country— without milking the customers their hard earned cashÔÇöand at the same time working towards increasing its shareholders’ value.
“We have enough cash and our challenge is to spend it,” Molefe has said.
Recently, the Society has added a string of new products and some aimed at youth empowerment by trying to help the youth to climb the property market ladder. The product is said to have been well received by the market.
The Society is currently anxiously awaiting the review of the Society Act which is still being discussed with the relevant authorities before it could surprise the market with a string of product roll-out.
One of the key elements within the review is expected to include a relaxation of the retail banking business rules that will pave the way for it to openly compete with commercial banks in terms of product roll-out and pricing.
At the moment, it is positioning itself to attract the high net earning clients into its banking halls and services by improving its IT platform and refurbishment of its branches across the country.
That will put it on the same wavelength with the tigers of the industry such as First National Bank of Botswana and Standard Chartered among others.
“We are currently working on our IT platform so that we can serve our customers better. We have strong capital base and what we need is a huge (IT) platform going into the future,” Molefe has said.
The company has declared an interim 12.8 thebe dividend per share, representing P 20.30 million.