The listing of BancABC Botswana will allow the corporate and retail bank to tap into the local market for funding as well as cement its position as one of the market leaders in the cutthroat local banking sector, its Chief Executive, Kgotso Bannalotlhe has divulged.
The regulator, Botswana Stock Exchange Limited (BSEL) has approved the bank’s listing which is slated for 10 December 2018; a development which will see the country having four listed commercial banks. Bannalotlhe said listing will also be an opportunity to allow locals to become part of their family by buying their shares, an opportunity that ended when the parent company-African Banking Corporation Holdings was delisted from the domestic bourse years ago.
“Listing will provide us with an opportunity to bring boarder shareholders in the form of pension funds and institutional investors into our shareholding structure,” noted the bank’s top executive who ditched rival Barclays Botswana last year. To this end, the bank has invited selected investors to apply to purchase up to 180,525,000 ordinary shares at a price of P2, 00.
ABC Holdings has proposed to sell nearly 25 percent of the ordinary issue shares. According to Bannalotlhe, 30 percent of the offered shares will be offered to clients of the sponsoring broker, who may be the public. Motswedi Securities is the sponsoring broker.
Part of the proceeds of the listing will be used to fund the group’s IT infrastructure project, from which the local subsidiary, as the biggest, will handsomely benefit. The IT project will focus on acquisition of a core banking platform as well as banking channels upgrade. The new infrastructure is expected to also allow the bank to improve their digital banking channels.
The 5th biggest bank by asset in Botswana is, like its peers, affected by record low interest rates which affect the bottom line. The bank rate is currently at 5 percent. It is expected to be at this level for some time, an analyst at Inkunzi Investment, Jonathan Paledi has said in a previous interview with Botswana Guardian.
“Bank of Botswana is likely to maintain rates at current levels well into 2019 but downside risks remain given the benign inflation environment and any rate cut could likely dent the interest income line segment for these banks,” he told Botswana Guardian. Bannalotlhe said as a bank, they have a long term vision of the country, suggesting they view the record low rates as cycle which will eventually end. The bank is expected to open more branches in the country next year, effectively increasing the bank’s more than 300 employees.