Botswana Buildings Society (BBS) has seen its profits swell by 8.8 percent during the first six months of the financial year to register P26.2 million as profit for the period. The society, which is on the verge of becoming the first indigenous bank following positive vote by shareholders to demutualize, said the improved performance was mainly due to the reduction in the interest expense emanating from the replacement of more expensive borrowings with lower priced debt. Managing Director Pius Molefe said the society continues to monitor impairment provisions over loans and advances taking into consideration the current challenging economic environment. “The society’s long-term loans and advances grew by 0.4 percent since the end of the financial year, this being 1 percent growth compared to the same period last year,” he said in the statement accompanying the financial results for the period ended September 2017. He said BBS capital base remains strong with capital adequacy ratio at 59.52 percent, which is higher than the minimum regulatory requirement of 15 percent. “The society complied with the borrowings requirements and cash and investments limit in line with sections 51 and 42 of the Building Societies Act respectively,” said Molefe.
BBS paid a total of P29.2 million as dividends which was paid to members at the end of September. The current dividend paid is 5 percent lower than the P30.6 million paid in the previous corresponding period last year. Molefe said BBS continues to make efforts to grow revenue at the same time keeping expenses as low as possible. During the period under review, Molefe said the net interest spreads were under a lot of pressure while costs were on the increase. “The board and management of the society are actively reviewing existing strategies and initiating new ones which will help the society to improve its performance, despite the challenging environment,” he said. Having received positive outcome at a Special General Meeting in August this year to demutualise the Society, Molefe said BBS is now actively preparing for a banking license as well as putting in place the right processes that will support the envisaged business model.