Bank profits rise to P1.7bn

Supervising: The Bank of Botswana’s oversight includes banks and their stability
Supervising: The Bank of Botswana’s oversight includes banks and their stability

The country’s commercial banks recorded collective after-tax profits of P1.67 billion in the first eight months of the year, an increase of more than P440 million from the corresponding period in 2021.

Bank of Botswana figures released recently indicate that the difference between the two periods was higher net interest income and significantly lower provisions for bad or doubtful debts.

Commercial banks’ net interest income in the first eight months of this year reached P3.2 billion compared to P2.9 billion over the same period last year, while the provisions for bad debts were measured at P87 million this year, compared to P279.3 million last year.

The banks’ performance in the first eight months of the year continues the sector’s recovery from the COVID-19 hit, which saw their collective after-tax profits declining by 13% in 2020 to P1.6 billion before improving to P1.9 billion in 2021.

The improved performance this year comes despite tighter margins, as the Bank of Botswana has increased interest rates by 151 basis points, while banks’ interest expenses have come under pressure from the need to compete for deposits.

Analysts believe the improved provisions for bad debts reflect the tightened credit risk assessment banks imposed in response to the pandemic. However, credit growth is gradually warming up, with the indicative rate reaching 6.6 percent in August, from 5.8 percent in July.

Editor's Comment
GBV: The big elephant in the room

Sadly, the country seems not to have proper tools and the extent to which women and the girl-child are being abused is not adequately measured.Almost every week there are reports of women being attacked by their significant others and while men are attacked as well, women seem to be more on the receiving end.On May 24, 2023 news broke that a woman who was receiving support from the Botswana Gender-Based Violence Prevention Centre in Gaborone, was...

Have a Story? Send Us a tip
arrow up