BBS expects better results in 2022
Botswana Building Society Limited (BBS) Managing Director, Pius Molefe said they anticipate improved performance in 2022 as the company’s transformation agenda is about to be complete.
He said management is working hard to eliminate the effects of challenges experienced during 2021 and to improve the company performance during the 2022 financial year. “The way forward for BBS Limited is now clear. Ours is a very hopeful future replete with exciting possibilities. We expect that 2022 will be a truly watershed year for BBS Limited.”
Molefe further explained that the Bank is back on track for commercialization and they are working very hard to satisfy Bank of Botswana conditions that will enable BBSL to be issued with a commercial banking license.
“I will not mention the conditions here due to the sensitivity of the process but I can assure you that we would be able to satisfy them with the support of relevant shareholders.”
He said the intention is for BBS Limited to operate as a commercial bank by the second half of 2022. “We are ready, BBS Limited is indeed poised to become a successful indigenous commercial bank. We have come up with a corporate strategy which leverages on this admirable legacy. There will be a broader range of products and services, many of which will be digitally enabled for the convenience of users while also adding to the bottom line.”
During the 2021 financial year, the bank’s profitability was largely affected by numerous factors including the cost of funding and stagnant mortgage loans and advances.
Molefe stated that the average cost of funding was adversely impacted by declining liquidity generally against elevated investor expectations due to rising inflation.
“This put pressure on yields as there was increased demand for better rates.
The cost of this funding was not offset by the amount of business the company was generating from mortgage loans and advances thereby negatively impacting margins.” Total balance sheet was reduced by six percent from P4.088 billion recorded in 31 December 2020 to P3.829 billion compared to 31 December 2021.
Mortgage loans and advances reduced by eight percent from P3.408 billion recorded in 2020 to P3.127 billion in 2021 while total customer savings and deposits, including paid up and subscription savings increased slightly by one percent from P2.494 billion to P2.511 billion.