Banks profitability plunging

While most banks profitability was largely lukewarm in the year, a 29 percent drop in profit before tax at Barclays pulled down the whole industry’s profitability ratios in the year   According to the Bank of Botswana Annual Banking Supervision report released last week, key profitability indicators maintained the downward trajectory as lower interest rates and reduced Bank of Botswana Certificates (BoBCs) impacted on profitability.

 While in absolute terms after tax profits for all commercial banks remained unchanged at P1.77 billion, profitability ratios tumbled with the Return on Equity (ROE) decreasing from 31.9 percent to 27.4 percent. Return on average total assets (ROAA) fell from 3.2 percent to three percent. “The growth in banking industry profitability was subdued in 2013.