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BBS shareholders show faith

SHARE   |   Monday, 22 January 2018   |   By Kabelo Adamson
BBS shareholders show faith

Following the share redemption process conducted by Botswana Buildings Society (BBS) which ended last week Friday, the Society’ spokesperson Sipho Showa says individual shareholders reacted in significant numbers to the invitation to buy shares in BBS Limited. Showa, Board Secretary and Head of Marketing and Communications at BBS, said this week that at this stage they are still confirming how many shares were bought. “It is quite an involving process given the many applications we received but we hope to have concluded it in the coming few weeks,” he said. Showa said they used various forms of communication over a two month period to invite shareholders to buy shares and shareholders were able to meet the deadline, adding that the on the whole, the process went very well. The redemption, which came to conclusion on the 12th of January this year, involved inviting existing shareholders to buy shares in BBS Limited. BBS has over 45, 000 shareholders majority of whom are individual shareholders. What will follow next, Showa said, are two key steps which will start with registering BBS as a company which will be known as BBS Limited and will be followed by the application for a banking license. “That is so because in law, a building society cannot apply for a commercial banking license,” he explained, adding that these two developments are scheduled for March 2018. Once BBS Limited has submitted its commercial banking license application, Showa said, they will give the Bank of Botswana (BoB) time and space it needs to assess and should the response from BoB be positive, BBS expects to be operating as a commercial bank by the first quarter of 2019. Asked if BBS has got plans to list on the Botswana Stock Exchange (BSE) in the future, Showa said the intention is to do a public listing at least two years after starting to operate as a commercial bank. “In the meantime, the BBS Limited shares that were recently bought by existing shareholders will be traded on the Serala trading platform which is a special BSE counter for unlisted equities,” Showa said.

BSS transformation began in August last year when 99.96 percent of the shareholders voted in favour of BBS demutualisation at Special General Meeting held in Gaborone. In December last year, BBS transformation got a boost when International Finance Corporation (IFC) announced a $25 million investment in BBS through listing of a bond known as Kgalagadi bond. IFC said the long-term funding will support the transformation of the Society into a full-service commercial bank financing underserved clients, including small and medium enterprises. BBS’s latest financial results for the period ended September 2017 shows that the society earned a profit of P26,194 million in the first six months of the financial year. The profit is 8.8% higher than the profit for the same period last year. The improvement in profits is said to be due to reduction in the interest expense emanating from the replacement of more expensive borrowings with lower priced debt. BBS Managing Director Pius Molefhe said the Society also continues to monitor impairment provisions over loans and advances taking into consideration the current challenging trading environment. He said BBS’s long term loans and advances grew by 0.4% since the end of the financial year, this being 1% growth compared to the same period last year. BBS was founded on 02 December 1976 succeeding the United Building Society of South Africa which had been in operation from August 1971. It was founded to provide affordable mortgage finance, investment and savings products to Batswana.