Swazi Observer

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SBS ON TRACK TO BECOME BANK BY EARLY 2025

By NOKUNCEDA MAGAGULA | 2024-10-06

The Swaziland Building Society (SBS) is making steady progress towards its ambitious goal of converting into a commercial bank, launching the second phase of this transformation with the aim of operating as a fully-fledged bank by the beginning of the 2025 financial year.

The conversion to a bank is a strategic move by SBS, designed to expand its product offerings and services to cater to the evolving needs of its customers.

As a bank, SBS will be able to offer a wider range of financial products, including loans, credit cards and investment services.

During an engagement meeting with the media, SBS Managing Director (MD) Mbali Sibanyoni explained that the second phase of the conversion process involved obtaining the necessary regulatory approvals and implementing the required systems and procedures.

SBS is working closely with the Central Bank of Eswatini to ensure a smooth transition.

“Our intention might not happen since we do not know how long it will take for CBE to process the application,” she said.

Sibanyoni explained that between now and November 15, the conversion notice would run for three months.

She said for another three months, they would be transferring the shares after they get the resolution to proceed.

She said this would allow those who had not yet decided whether they should move with the change to think about their decision.

“Once we are done with that, there is also another three months, where we will be moving the application of a banking licence to the CBE,” she said.

The MD explained the term conversion in order to accommodate all the bank’s customers, stating that it is the overarching term used to describe the change in the legal nature of SBS from a building society governed by the Building Societies Act and Society Rules into a public company (SBE) registered and incorporated in terms of the Companies Act.

She said SBS transition to a bank meant a change from being regulated by FSRA to CBE, securing a banking licence from CBE to provide a wider range of products and more opportunities for business growth and sustainability.

Sibanyoni added that the society has been in existince for 62 years. She emphasised that they had to ensure that the conversion was legally and financially economic correct for the society and Emaswati.

She said amid the conversion, they were mandated to protect the deposit that they currently hold, which had resulted the delay in transitioning.

“We were doing it to meet depositor’s interest since the Society is not only made up by permanent shares.” She added that they had come with the conversion statement that takes care of all the interested stakeholders, including the society’s employees.

…Conversion to broaden Society’s offering

The conversion to a bank will increase services offered by Swaziland Building Society to its customers.

SBS Managing Director (MD) Mbali Sibanyoni said the society experienced limitation to what it could offer as it only had two products which were mortgage and personal loans.

“This is not something that can sustain a business that has been existing for 62 years,” she said.

Sibanyoni said the Society wants to create a one –stop shop for its customers and wealth holistically.

She stated that the society also wanted to tap into financing of micro small medium enterprises (MSME’s).

“We need to be able to embrace financial inclusion and want to be a solution driven entity,” she emphasised.

The MD added that they aim to look more of a professional entity and be able to service everyone.

“Being the oldest financial institution in Eswatini, we have taken long to move into the space,” she said.

She said to remain sustainable, the board saw it fit that they add more products.

She said they needed to convert the society into a public company then move to apply for a banking license “The transition does not mean that challenges will not be there, as it has been seen in our latest financial results. however that does not mean that it is the end for the society,” she said.

She said as the Society would be moving into the banking space, they hoped to improve its governance because it was one of the important factors in that space.

“In the society the rules had not looked at the existing governance. however we must know that in the banking space governance is highly regulated, so the governance has to be on point, including how the board is elected, and that will be one of the added advantages once we became a bank,” she said.

… to be called ‘SBS Bank of Eswatini’

The Swaziland Building Society will be called SBS Bank of Eswatini after fully transition to a bank.

SBS Managing Director (MD) Mbali Sibanyoni said with that name, they still wanted to maintain their identity. She said SBS would be one word and not an acronym.

She added that they were also looking into joining Eswatini Stock Exchange (ESE). The MD said it would not be done immediately as they would have shares that have not been issued, however, as they grow they would want to issue them. “ESE will make it easy for us to do that,” she said. She stated that they have been benchmarking since the idea to transition came alive and got consultants to conduct research on behalf of the Society.

“We have been looking at entities that have had also converted from being a society to a bank within the Southern Africa Development Community (SADC) and internationally,” she said. Sibanyoni said recently they had been looking into the Botswana case. “The good thing with that case is that it is recent and was done by the consultants we are also using,” she said. She said they were observing what they could avoid, their successes and they were further engaging with them.

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