BBS turns to borrowing as loans outpace deposits :: Mmegi Online

The country's sole indigenous commercial bank, BBS advanced loans of P4.6 billion against customer deposits of P4.5 billion last year stretching the bank's books amidst a tightening fiscal environment in the country's financial sector.

The bank's loans-to-deposit ratio stood above 100%, indicating that the bank had maxed out its deposit on lending and now had to turn to external sources for funding of other loans. Whilst the bank demonstrated robust growth in its loan book and profitability metrics in 2024, it faced pressures in its cash reserves as it lent more than deposits and also registered a drop in its liquid assets nearing the prudential requirement set by Bank of Botswana.

The banks executive in a recently released 2024 annual report posted on the bourse revealed that they would turn to borrowing and diversifying their income streams in order to improve their liquidity and increase their loan to deposit ratio.

Already have an active account? Log in here.

Or Sign up and get unlimited access to premium articles.