BBS UNABLE TO PAY DIVIDENDS, AS LOSSES CONTINUE
Botswana Building Society Limited (BBS) is still not in a position to pay dividends to shareholders due to continuous record of losses over the past four years. The bank recorded P25 million loss in its year ended December 2021, compared to a loss of P115 million in 2020. Commenting on the results, BBS Chairman, Benard Mzizi said the impact of the performance of the company on Shareholders is that regrettably, BBS Limited is not yet in a position to pay dividends. “This is a matter of great concern for us as well and we are hoping to stabilise the business fully once we have started operating as a commercial bank since we will be able to introduce new income streams. Shareholders would then start reaping the rewards of their investments once again.”
BBS listed on the Botswana Stock Exchange, Serala trading platform in 2018 as the first company to trade in the platform. Serala trading platform is a special BSE counter for unlisted equities. In 2019, the Company recorded a loss of P35.7 million compared to a loss of P26.1 million which was recorded for the 9-month period between April 2018 and December 2018. The bank management had stated that the observed loss was primarily due to the change in the capital structure as some amounts which used to be classified as ‘equity’ are regarded as liabilities and have started earning interest as opposed to getting a distribution from profits. “Further
more, implementation of IFRS 9, an accounting standard, requires BBS Limited to make loss provisions for accounts even before they default.” During 2021, Mzizi said the bank lost some traction as a result of COVID-19 because fewer customers than normal came through to take up mortgage loans. “There were also significant withdrawals of savings as customers sought funds to meet their financial needs.” He said as a company, they came up with strategies to mitigate the impact of COVID-19 which included giving mortgage customers repayment holidays especially as some of them lost their jobs or were put on half salaries by their employers.