Africa-Press – Eswatini. The Status Capital Building Society is actively planning to raise the necessary funds by the end of the financial year 2023.
This is according to the press statement issued by the building society yesterday. It was reported that on Average, Status Capital Building Society’s total assets grew by 174 per cent when compared to the financial year 2020 and recorded a positive growth of 200 per cent increase in member loans in the financial year 2021. The building society reported that although operational costs have increased from E2.7 million in financial year 2020 to E9.3 million in the financial year 2021. The building society stated that the rise in expenses indicated a stronger growth position for Status Capital Building Society compared to when the building society commenced operations.
Grown
It was also reported that the personal loan portfolio has grown substantially – loans and advances increased to E17.9 million in 2021 from E0.186 million in 2020 – proving the successful diversification and appeal of their products. Nomfundo Fakudze, the newly appointed Executive Director of Status Capital Building Society, said, “One thing we are certain of is that we are optimistic about the future of our Building Society and remain committed to delivering sustainable investment returns for our shareholders.” Fakudze said although the society made a loss in 2021, there were long-term innovative plans in place to strengthen and steady the brand. She said their dedicated team was working tirelessly to resolve existing issues and ensure past mistakes were not repeated. She said they were confident that through these efforts, they reassured their shareholders and clients that the organisation would get back on track and deliver value for all stakeholders.
The primary cause for losses experienced by Status Capital Building Society was attributed to a combination of factors, that included high outsourcing fixed costs and delays in the launching of the banking system to ensure they diversify their revenue resources- all of which were addressed in 2022 by decentralising operations from management companies to ensure expenses were reduced.
Costs
“Our losses remained large for this financial year, which was expected as we continued to invest and grow our business, resulting in higher costs” said Fakudze. The society mentioned that one of the other factors for poor performance was the advent of the COVID-19 pandemic which also meant that their development and progress was slowed down whilst some of the expenses aligned to such projected growth could not be avoided. The building society’s loss for the year, totalled E9.4 million for the financial year 2021, compared to E2.8 million for the financial year 2020. It was mentioned that a significant portion of their expenses being E17.2 million was paid out to members under their fixed deposit product, sustaining many households during this COVID-19 period which resulted in high interest expense.
These were mitigated in the following financial year and the society’s interest expenses dropped by a net margin of 3.75 per cent. Comparing the scales for start-ups within the Financial Sector, the Building Society maintained a low capital expenditure and continued to stagger its capital projects to minimise huge loses. During this same period, Status Capital Building Society also tripled its customer base, there was an increase in assets and the Society expanded both its senior management team and support staff. The society mentioned that it deeply regretted the impact those figures may have had on the trust that their customers and stakeholders have placed in them.
Address
However, the society said they took the opportunity to address these concerns as part of their commitment to transparency. Since then, the Building Society’s immediate focus has been on stabilising and restoring the Building Society’s operations and ensuring that the significant investment into the society’s startup costs yields positive results in the long run. “While there are inherent risks in securing the required capital on favourable terms, we are encouraged by our customers’ support this year and from recent positive discussions with potential partners in 2023,’’ she said.
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