The central bank, Bank of Botswana does not prescribe that the shares of banks operating in Botswana be listed on the domestic stock exchange; this is according to BoB Governor, Moses Pelaelo. Pelaelo was speaking on Thursday at a gala dinner hosted by Stanbic Bank as it celebrated 25th anniversary of operating in Botswana. He was the guest speaker. The governor said this is consistent with accepted best practice and governance norms that the board and management of individual firms should be allowed to determine the appropriate capital structure and economic capital management for a bank, subject to meeting the minimum threshold for prudential regulatory capital adequacy requirements. Only four commercial banks out of 10 licensed banks are listed on the local bourse while the rest are not listed. Pelaelo said the non-existence of Stanbic Bank on the domestic bourse could be misinterpreted to mean lack of long-term commitment and willingness to have the Botswana public participate in the ownership of the bank. “This point assumes particular significance in the context of a country where all 10 licensed commercial banks are subsidiaries of foreign-owned entities,” said Pelaelo. Stanbic is a wholly owned subsidiary of Standard Bank Group, which is believed to be the largest Pan-African banking group by assets amounting to R1.85 trillion, approximately P1.6 trillion or $154.5 billion.
Pelaleo said Stanbic bank Botswana is supported by a strong parent and a well recognised franchise, regionally and globally which he said presents opportunities and challenges. The BoB governor believes Standard Group’s representation in other international markets places it in an advantageous position to fill the gap that may be left by some of the global banks as they decide to move out from certain markets. This process, he said, is referred to in the industry as regulatory deconsolidation or global de-risking or in certain cases, withdrawal of correspondent banking services, for a variety reasons. Pelaelo said as indicated in the 2012-16 Botswana Financial Sector Development Strategy, “a healthy and vibrant financial sector is crucial for the future of Botswana. Financial institutions and markets safeguard savings; provide the financing required for growing private sector, and make an important and growing direct contribution to employment and economic growth”. Just like Linah Mohohlo - his predecessor - Pelaelo decried lack of support by some large banking groups to the SMMEs and other segments of the society which tend to be left out of the banking system.
He said they have a tendency to engage in some form of “cherry-picking” of best companies and wealthy customers for credit support to the exclusion of the SMMEs, non-salaried persons, low income groups and other underserved of society. “In order to continue to contribute positively to sustainable economic development, the Botswana banking system should be more inclusive,” he advised. Pelaelo said banks ought to invest more in risk management infrastructure to be able to tap into new resources and opportunities, including identifying and funding bankable projects originating from low-income groups and small enterprises in a safe and prudent manner. He said failure to do could in the long-term result in banks being marginalized as fintechs and block chain technologies increasingly satisfy the demand for financial services in more innovative and cost effective ways. Stanbic Bank Botswana CEO, Leina Gabaraane said: “25 years of having our doors open to Batswana means 25 years of supporting individuals, families, business, communities and a nation. It means 25 years of building great relationships, being a part of the narrative of people’s lives; the lives of those driving big industry and sector deals to further boost our economy, in mining, metals, oil, gas, power and infrastructure etc.; the life of a young entrepreneur starting his first business; the life of a father buying his first family car or saving for his daughter’s university education … I believe we are most fortunate to be able to wield impact in such way.” Stanbic Bank Botswana first opened its doors on March 2nd, 1992 with 24 staff members. Today, Stanbic Bank has a total of 603 staff members across 10 branches nationwide. Stanbic Bank provides the full spectrum of financial services and operates within two divisions: Corporate and Investment Banking (CIB) and Personal & Business Banking (PBB).