The date for BancABC listing on Botswana Stock Exchange Limited (BSEL) has been set for December 10 when its shares will officially start trading on the BSEL.
It will become the fourth commercial bank to have its shares trade on the country’s stock market.
In the build-up to the listing, the bank has invited selected investors to apply to purchase up to 180 million shares at a price of P2. 00 per share.
Offer to purchase shares opened on the 6th of November and will remain open until the 23rd.
Speaking at a recent press briefing to outline the reasons for listing, BankABC Managing Director Kgotso Bannalotlhe said the idea is to attract a number of stakeholders in Botswana into the shareholding of the company and in turn serve the long-term interest of the holding company.
“The decision to list the bank is in line with the bank’s strategic focus of consolidating our market position,” he explained, adding the bank’s parent company, African Banking Corporation Holdings (ABCH), has placed on offer up to 24.90 percent of BancABC Botswana shares in a secondary sell down by way of private placement to select investors.
Currently BancABC is Botswana’s 4th most profitable bank and 5th largest in terms of assets. The listing is expected to further raise its profile in the banking industry.
Continuing with his theme, Bannalotlhe said listing would provide the company with greater access to efficient capital markets in raising local funding to support future growth plans.
Proceeds from listing are to be used for migrating and upgrading core banking software of all banks and implementation of a centralised Point of Sale (POS) processing platform.
According to Bannalotlhe, the bank began refreshing its service offering last year and has started upgrading its banking infrastructure and expanding branch network.
Researchers at local brokerage firm, Motswedi Securities have in their pre-listing research described BancABC as a remarkable success story in Botswana with a track record for innovation.
With a Capital Adequacy Ratio standing at 19.4 percent, researchers believe this positions the bank with a robust capital base which will support its growth in the medium term.
The institution is said to offer a good investment case in such that it maintains a quality loan book, with Non-Performing Loans (NPLs) declining from 4.2 percent in 2016 to 3.6 percent during the 2017 financial year.
While the bank remains profitable, Motswedi Securities Researchers have cautioned that it needs to diversify its loan book.
This is because BancABC lending is skewed towards consumer lending at 73 percent with the large part of its book being unsecured personal loans.
Currently the biggest concerns in the banking industry are said to be high levels of households indebtedness – diversifying from the household is believed will go a long way in managing this risk.