Two of the country’s biggest lenders- Standard Chartered Bank Botswana and First National Bank Botswana - are expected to report dampened financials because of BCL closure.
The commercial banks, which have a combined market value of more than P10 billion have already raised red flags ahead of their full and interim results respectively. The oldest bank in the country, Standard Chartered, has told its shareholders that ‘the full impact of the liquidation of BCL group on the 2016 financial performance of the Bank is still being determined’.
The bank, which is headed by Moatlhodi Lekaukau, is expected to report full year results in the coming months. It has warned shareholders to exercise caution until the results are announced. Botswana Guardian could not establish the full exposure of the BSE quoted-company as they are in closed periods which limit comments on operations for the period (2016).
BCL has been put under liquidation due to pressures from inside and outside their sphere of control such as weak commodity prices in the global market. Government appointed liquidator of BCL mine, Nigel Dixon-Warren told the press on Tuesday that the mine cannot be saved. It can only be stripped and sold in parts or wholly as early as July this year.
Suitors have already lined in to get assets of the decades-old copper mine. The mining group owes creditors more than P1 billion. Meanwhile, Standard Chartered’s peer, FNBB has also told its investors that they have determined the full impact of the closure of BCL mines. A cautionary statement signed by acting Chairman, John Macaskill and Chief Executive, Steven Bogatsu, says the full details of the impact will be made public when the bank releases its interim results to December next month(February).
The bank, which is a unit of South African banking group, FNB has also told shareholders to tread carefully when dealing with its shares at Botswana Stock Exchange (BSE). Meanwhile, Barclays Bank Botswana appears to be the only creditor that is smiling all the way to the bank. In March 2016, the listed bank which traces its origins from Britain bailed out BCL to the tune of $100million (about P1 billion).
The loan fortunately was guaranteed by the government who is the sole shareholder of the BCL mine. Botswana Guardian reported last week that government has since paid back the loan, citing various sources close to the deal. Secretary for Development Budget in the (Ministry of Finance and Economic Development), Cornelius Dekop confirmed that indeed government in its capacity as the mine owner and guarantor has paid the facility that the bank advanced to the BCL mine.
“We settled the principal amount in full at the end of December 2016. Originally, we have been contractually obligated to pay interest as BCL failed to do so before they were put in provisional liquidation,” Dekop was quoted saying.