BBS focuses on recovery after tough 2025
Mbongeni Mguni | Monday April 13, 2026 06:00
BBS, the country’s only indigenous bank, has swung between periods of losses and profits in the three years since it kicked off commercial banking operations, a period executives describe as formative, transformational and associated with set-up costs.
From pretax profits of P44.9 million in 2024, BBS sank to losses of P133.7 million in the year ended December 2025, weighed down by broader market liquidity pressures that saw interest rates spiral in the country, amidst a scramble amongst banks for deposits.
While the bank’s interest income rose 16 percent to P556 million, the liquidity crunch in the market saw interest costs rise 53 percent to P412 million, wiping out the earnings.
BBS managing director, Pedzani Tafa, told BusinessWeek the liquidity crunch was the type of headwind to be expected in the banking sector. She said the bank had anticipated that it its initial five years after transitioning to commercial banking activities would possibly involve weak results.
“All things equal, we did know that these first five years would be very heavy on set-up costs and that take-up of our products and services would be steady,” she said on Wednesday. “You don't anticipate beforehand that liquidity in year three will be a challenge, but then it happens and those are the normal business cycles that do happen, or normal headwinds that do occur.”
BBS was able to raise its deposits by two percent to P4.6 billion, while assets rose one percent to P5.6 billion. Within that, the bank’s loan book was nominally flat at P4.6 billion. Tafa stressed that the bank was comfortably ahead of regulatory ratios and indicators, despite the fall in profitability, adding that its loans to deposit position was closely monitored by a committee.
“The Assets and Liabilities Committee, that has to be there as one of the requirements of running a bank, is the one that regulates or oversees the bank's balance sheet and it looks at our pricing and the levels that we have in the bank. “The Alco committee looks at the extent of our deposits, the extent of total loans and advances to customers and the relationship between those two when you look at the basic banking principle of funding before you lend. “It keeps a very close eye on that and makes decisions on what to do as and when situations happen,” she told BusinessWeek.
Tafa said the young bank had held its own in the market, wrestling for deposits and advancing growth through uptake of its various products and services. She said part of the transformation strategy entailed launching products and services that would be competitive in the market and allow a build-up of momentum.
“We are a fully-fledged commercial bank and we have products that are geared atto attracting customers to deposit their money here,” she told BusinessWeek. “That's why this first maiden transformative strategy was to launch products and services that would enable us to be just as competitive. “That is also why when there are headwinds, the headwinds will affect us in the same way that they affect any commercial bank. “So within the first three years of our transformation, we have been able and we have successfully launched those products that would attract customers and as they do take up our products, we are mobilising deposits.”
Tafa said going into 2026, BBS focus was to continue working hard at restoring profitability and also retaining current customers, while securing new ones onto its books.
“Throughout the five-year strategy, we had set out what we would be in year one, year two, year three, year four, right up to year five. “So we expect that as we complete the set-ups per year, we expect the consumption of our products and services to increase year on year following the launches. “I think it is also known that when you start up a particular business, it doesn't become profitable in the first years. “When you look at Botswana, the limited population obviously means that the customers that you want to bring on board are multi-banked and so you are moving customers across banks and that is not a quick decision to make. “We know that the uptake of our products and services will be gradual and as we reduce our setup costs and increase the consumption of our products and services, the bank will stabilise,” Tafa said.