Infinite opportunities for BBS Bank

Bernard Mzizi

BBS Bank, Chairperson

I t is a new dawn in so many ways for BBS Bank. Yes, “BBS Bank.” Therefore, before I focus on the performance for the year ended 31 December 2022, I would like to begin by highlighting that we were granted a commercial banking licence effective 6th October 2022 making BBS Bank, Botswana’s first indigenous commercial bank.

We could not have achieved this incredible feat without your support. You believed in the infinite possibilities that a commercial banking operation would offer beyond those of a building society leading to you supporting the demutualization process at the Special General Meeting of 24th August 2017 held at the Avani Hotel & Conference Centre in Gaborone. We recall that the vote in favour was 99.99%. Your belief in where we were going was very strong. To improve the performance of the business, the Bank launched an Insurance Agency in June 2022 as part of its longterm strategic intent to diversify its portfolio and offerings. It is expected that the Insurance Agency will make a significant contribution to the Group performance going forward. Therefore, when we refer to “Group” in subsequent paragraphs and statements, please note that we are alluding to the fact that BBS Bank has a subsidiary.

Boards, past and present

It would also be remiss of me and current colleagues on the Board, if I did not thank former Board Members especially from the 20th September 2004 Board Meeting comprising Mr. Pontius Mokgosona who was Board Chairperson, Mr. Derek P.F. Brink, Mr. Nightingale K. Kwele, Mr. Oaitse T. Mapitse, Mrs. Tebogo S. Kesupile, Mr. Large Charumbira, Mr. Seagiso M. Ramatshaba and the then Chief Executive Officer Mr. Pius K. Molefe, when the idea to commercialise the then Botswana Building Society was birthed. This was followed by the work of subsequent Boards and Management teams to convert the business culminating in the issuance of the banking licence by Bank of Botswana. To that end, I would like, once again, to express my gratitude to Bank of Botswana for the confidence it has exhibited in BBS Bank by granting us the licence. We will live up to its expectations. Further, we have appointed a Managing Director Ms. Pedzani Tafa who joined us on 04 January 2023. She also makes history by being the first Managing Director of Botswana’s first home grown-commercial bank. Ms. Tafa is a seasoned commercial banker with over 30 years in banking, having held senior positions with some of the leading banks locally. We are confident that she will take BBS Bank and its brand to greater heights. My colleagues and I are fully committed and energised to take BBS Bank into a bright future. Let me also take this opportunity to thank the former Managing Director of BBS Limited Mr. Pius Komane Molefe who retired on 01 June 2022 having led the organisation from 01 February 2004 when it was still Botswana Building Society. I would also like to thank him for his vision and leadership over the years, which has led us this far. We wish him well in his future endeavours.

Government relations

I would also like to thank the Government of the Republic of Botswana, which through the Office of the President, the Ministry of Finance and the Attorney General’s Chambers was an excellent partner both in drafting relevant enabling legislation to commercialise the business and presenting it to Parliament for approval. The amended Building Societies and Companies Acts were indeed ultimately signed into law within a reasonable time. It was this support that made it easier to gain the confidence of shareholders and other stakeholders.

Financial Performance

The Group recorded negative performance for the year ended 31 December 2022, marked by a loss of P20 million. Nonetheless, the Group managed to maintain stronger Liquidity and Capital Adequacy Ratios throughout the year. Detail on key performance indicators is summarised in the Managing Director’s Statement. The financial performance under review, although not what we would want it to be, does not point to an irredeemable situation as I pointed out in my December 2022 update to shareholders. We believe very much in the underlying strength of BBS Bank. The issuance of the banking license by the Central Bank also eliminated uncertainties which existed in the previous year with respect to the timing of the rollout of the commercial banking services and products. Management has made progress with the acquisition of commercial banking capabilities which will enable the bank rollout and diversification of income streams. Although, the Bank will incur significant transformation expenses in 2023, it is expected that the business performance will improve over time. We will turn the fortunes of BBS Bank around now that we are able to offer a suite of products and services at the back of investing in the right infrastructure and systems, developing our people etcetera. Products are being rolled out gradually and will have a positive impact on the bottom line. The new dawn that I referred to, fits in well with all the changes that have taken place in recent months. We must now do things differently driven by the right mindset and culture, in order to deliver desired results. While we should correctly be interested in the share price, I would like to urge you not to be too concerned about it in the short term. Growth of shareholder value is a long-term process. In due course, it will improve based on the earlier mentioned measures we are implementing.