Stanbic Bank, an off-shoot of Africa’s leading bank, Standard Bank of South Africa, raised a P 2 billion bond in a bid to mitigate the market appetite for credit, especially from the emerging diamond cutting and polishing.
The bank sprang to action this week by listing three bonds, one of them positioned against the Bank of Botswana Certificates (BoBCs) while the two were long dated to achieve the risk parameters.
“This is a pleasing day for Stanbic Bank of Botswana. Our first bond was over subscribed three times while the other one was over subscribed 1.5 times and the pricing was so good,” Managing Director Stanbic Bank of Botswana, Dennies Kennedy, said on Friday.
“All the bonds were structured by our local team and I think it was a pleasing thing,” he added.
Recently, Stanbic has been the leading sheep in structural products taking the leadership from Barclays Bank of Botswana, which has controlled the market for a long period of time.
“This will help us with the balance sheet issues and it will give us good credit,” Kennedy said.
The bank is faced with a number of challenges from the marketÔÇöespecially from the resource sectorÔÇöwith the funding of the diamond cutting and polishing and the titanic Morupole expansion project which is aimed at addressing the power outages currently experienced across the country.
The other challenge will be to assist in the funding of Mmamabula coal project which is estimated to cost around US $ 10 billion (about P 60 billion) which is expected to be up and running by the second half of 2013. The project is expected to give power to Botswana and South Africa, which will change the present balance of trade between the two countries.
“We are very hungry for the business and we would like to participate in the Mmamabula project whether as advisors or directly funding the project,” Kennedy said, adding that his bank is prepared to follow government’s plans of developing Botswana.
Recently, the bank has set up the diamond suite to address the needs of the cutting and polishing demands and it is getting loan orders in the range of US 15 million per client every month. The figures are expected to raise up to US $ 300 million per client as the market matures when the beneficiation plan develops to jewellery manufacturing in the next two years.
Stabic Bank, which is a subsidiary of Standard Bank, operates in 18 African countries and recently it has announced plans to expand its operations within Botswana beyond six branches it now holds within the country. Further, it has operation in 22 other countries outside the African continent.