BBS goes for special meeting
Botswana Buildings Society (BBS) goes for a special general meeting this coming Thursday which if all its resolutions are passed, will pave way for demutualisation that will convert the 40 year old Society into a company limited by shares.
Depending on the outcome of the meeting which will be held at the plush Avani Hotel on the 24th of August 2017, the Society will proceed with applying for a banking licence with Bank of Botswana (BoB). That is if shareholders pass the resolutions which have been put before them.
Next week Thursday will be a busy day for BBS, which will, before the special meeting host its normal annual general meeting at the same time. Ahead of the special meeting, the Society’s Head of Communications Sipho Showa said they have a war chest that they will deploy once they get the nod to operate as a commercial bank, taking competition right into the doorsteps of the likes of Barclays, Standard Chartered and Stanbic banks.
The Society’s balance sheet is healthy, Showa has stated. “BBS already has capital for plans post its demutualisation. Nonetheless, as more products and services are introduced, and in the normal course of business, it will obviously require additional capital,” he said in a written response to BG Business section this week.
For the year to March 2017, BBS reported a profit of P47, 8 million, down 13 percent when compared to the year before. New Chairman for Board of Directors, James Kamyuka said the results are ‘admirable’ given the difficult year the Society operated under.
“The fact that the Society continues to be profitable is testament to its resilience as a business. However, the performance confirms the need to transform the business,” he wrote in the annual report released recently.
According to Showa, who is also the Board Secretary, BBS has about 45 000 shareholders which include both individuals and institutional investors. It is not clear if BBS has planned a counter strategy should all shareholders pitch up to vote in one of the conference rooms at Avani. Top institutional shareholders include Motor Vehicle Accident (MVA) Fund, Botswana Police Staff Welfare Fund and Botswana Privatisation Asset Holdings, which represents Government’s interest. Two weeks ago, finance and economic development minister, Kenneth Matambo failed to disclose to Parliament how much shares government owns at the Society. Nonetheless, Showa said BBS will become a better institution post demutalisation. “Reasons to demutualise BBS have been publicised adequately over the years in various BBS Annual Reports. The reasons include the need for BBS to compete effectively with commercial banks by having more products and services instead of relying overwhelmingly on its mortgage offering,” he stated.
Managing Director, Pius Molefe added: “Strategically, this transformation will result in a stronger BBS financially and operationally which will also deliver high shareholder value over the coming years. We expect to operate fully as a bank by the first half of 2019 subject to obtaining the relevant shareholder and regulatory approvals”.
BBS is hopeful it will be granted a banking licence. Recently, BoB Governor, Moses Pelaelo told the Press they are in support of an indigenous bank. However, applications are thoroughly assessed not based on whoever is applying. Some local companies such as Letshego have had their applications turned down. At BBS, executives are in high spirits. “I am optimistic about the future of BBS and it will be made stronger by becoming the first indigenous commercial bank. BBS’s continued success is as a result of the dedication of its employees across Botswana whom I would like to thank,” said Molefe