Friday, September 30, 2022

NDB’s wobbly financial position troubles Central Bank Governor

The Bank of Botswana governor, Moses Pelaelo, says they continue to be worried by National Development Bank’s precarious financial position.

Pelaelo made his views known last week Friday when probed by Guma Moyo, the Statutory Bodies and State Enterprises committee chairman, who asked the central bank chief if he is not bothered by the dismal performance of NDB.

Bank of Botswana – amongst its many functions and responsibilities ÔÇô regulates and supervises banks operating in Botswana. NDB is one of the three statutory banks under the gambit of Bank of Botswana’s supervision.

“We are worried about the deterioration in NDB’s financial position. As you know, the bank does not take deposits and it is funded by the government. By extension, the losses are funded by the government” Pelaelo said.

The governor said as a central bank they cannot directly intervene because it is outside their purview, however he advised that government should decide if they want NDB to continue as a development bank or change its business model to reduce the losses.

NDB which appeared before the same committee last Wednesday was a letdown as the bank failed to produce audited results. Lorato Morapedi, NDB’s chief executive officer, said the delay in releasing the financial statements is due an audit. The bank’s reporting period is in March, then after it has about six months to publicly release the results. However, the loss making NDB failed the September deadline, and has since sought an extension from the ministry of Finance and Economic Development to submit in November.

The government owned development bank has been making losses since 2014, with last year’s loss coming at P161 million. The bank’s dismal performance has been down to poor collections strategy, compounded by weak risk management that have seen impairments rising in the last reporting period. In 2016 the bank received a capital injection of P400 million from the government, with P100 million as equity and the remaining P300 million as a loan.


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