The country’s commercial banks recorded collective after-tax profits of P529.6 million in the first three months of the year, an increase of more than P77 million from the corresponding period in 2021.
The latest Bank of Botswana figures released recently indicate that the difference between the two periods was higher net interest income and lower provisions for bad or doubtful debts.
The banks’ performance in the first quarter 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 improving profitability among commercial banks comes as credit growth also increases, with total outstanding loans to all sectors rising to P69.6 billion in March, compared to P69 billion in February and P65.6 billion in March 2021.
Local banks tightened their credit expansion in response to COVID-19 while the appetite for credit products in the local market also declined due to the impact of the pandemic on business conditions and disposable incomes.
In March, household debt accounted for 66 percent of the total outstanding commercial bank loans and within that, 71 percent were classified as personal loans.