Bank Gaborone recorded double digit growth in profits, loan book and assets, by driving growth in key sectors such as agriculture, mining and construction. Managing Director, Olebile Makhupe, tells MBONGENI MGUNI that even as the economy tightens, the bank will stand with its customers for sustainable development
Mark Twain’s famous quote about an umbrella, the bank and rain, is in the minds of some sectors as the economy endures a difficult period.
“A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain,” goes the quote by the legendary American writer.
However, at Bank Gaborone, managing director, Olebile Makhupe, says the Bank, through its customer-focussed approach, holds an umbrella for its customers when it rains.
As one of the country’s key lenders to sectors such as agriculture, mining, construction and others such as fuel and logistics, Bank Gaborone is powering growth beyond the current economic difficulties.
Makhupe speaks on the Bank’s most recent performance, its strategy and outlook, as well as its focus on being the country’s most customer-centric bank, a stance captured under the philosophy: “We don't bank money. We bank people”.
Mmegi: Your last available results, for the full year ending June 2024, show an impressive performance around profit before tax, loan book and deposit growth as well as other indicators. May you briefly take us through the highlights of this performance?
Makhupe: Bank Gaborone delivered strong financial performance for the period ending June 2024. Our Profit Before Tax grew by 18.9%, reaching P123.0 million from P103.3 million in the previous year. Our loan book expanded by 17.28% to P6.7 billion, driven by strategic lending across multiple sectors, including agriculture, mining, and construction.
Similarly, customer deposits grew by 18.1% to P8.0 billion, supported by a 41.98% increase in current accounts, 33.31% growth in savings accounts, and a 31.21% rise in demand deposits.
Other notable highlights include:
• Net interest income growth of 34.4%, reaching P348.3 million, supported by prudent cost-of-funding management and strong loan book growth
• Non-interest income growth of 16.8%, reaching P132.3 million, due to increased adoption of digital channels, Point-of-Sale (POS) transactions, and our Easy2Pay mobile Point of Sale solution
• Capital adequacy ratio at 15.64%, well above the regulatory requirement, reinforcing our financial resilience.
Despite a challenging macroeconomic environment, these results affirm our solid strategy and the market’s confidence in Bank Gaborone. It’s quite a solid performance and it is testament to the confidence our customers have in us as a bank.
Mmegi: The broader economy continued to face difficulties during that reporting period, according to Statistics Botswana figures. How was Bank Gaborone able to manoeuvre through these challenges?
Makhupe: The economic landscape remained challenging, particularly with a slowdown in key sectors like diamonds and mining. We are a relationship bank at our core and we really go out of our way to stand by our customers’ sides to support them through difficult economic cycles.
Although the economy was challenging especially in mining where we have exposures, we went through by staying true to our commitment to improve the lives of the communities in which we operate.
We are committed to playing a meaningful role in our communities and our customers reward us with their business. We look at the government initiatives, what the national priorities are and we align with them because we see ourselves as a partner to all our stakeholders. We look at sectors that can create employment and promote economic growth.
We navigated these difficulties through:
• Strategic diversification: Continued support of the agricultural sector, diversification into construction, and other resilient sectors helped mitigate risks.
• Customer-centric approach: We didn’t want to join the ever-growing unsecured lending space without ensuring borrowers are not overindebted. Our strong focus on financial education and rehabilitation programmes ensured responsible lending and better customer financial management.
• Digital transformation: The rise in digital banking and electronic transactions provided new revenue streams and increased customer engagement.
Mmegi: What were the underlying factors that helped this success, particularly in the growth of the deposits and loan book by double digits?
Makhupe: Our loan book growth of 17.28% and deposit growth of 18.1% were primarily driven by:
• A diversified lending strategy: Focus on high-potential sectors like agriculture, mining, and construction, alongside increased personal banking penetration.
• Deposit mobilization efforts: We grew deposits through competitive products, particularly in transactional banking, digital services, and payroll-linked accounts.
• Digital banking expansion: The continued adoption of POS transactions, online banking, and the Easy2Pay solution significantly boosted both lending and deposit growth.
• Customer confidence and trust: Our strong capital adequacy and profitability growth reassured both retail and corporate depositors, fostering increased savings and investments.
The financial education and rehabilitation programmes helped to grow our deposits and loans.
We appointed a third party called Ignytwealth, owned by a young Motswana gentleman, which works with union clients, checking their exposures, proposing solutions, providing education and structuring their debt. We avail these services at the Bank’s expense to our borrowers for a period of a year before Ignytwealth can recommend them to come forward to the Bank for credit solutions.
Mmegi: Please share briefly on the three-year strategy that Bank Gaborone initiated in the past calendar year. What are its motivations and the envisaged key results?
Makhupe: We are excited about the Thobo 2026 strategy and we want to drive sustainable growth, digital transformation, and customer-centricity. The main focus for the bank was to modernise the bank as much as possible, which accounts for our internal operations, product offerings and ensuring that financial services are available in underserved communities. In the first year we focused on investing for scale where we identified areas for growths, and this year we are focusing on growing our customer base through enhancing our customer experience. Key focus areas include:
• Growth & Diversification – Expanding into new business lines and priority sectors like green financing, SME banking, and value-added financial services.
• Digital Transformation – Investing in modern banking technology, enhancing digital payments, and increasing the adoption of electronic channels.
• Customer Experience Excellence – Focusing on delivering market-leading service and personalized financial solutions.
• Sustainability & ESG Initiatives – Strengthening our green finance programs and community investment projects.
So far, we are at one and a half years through the Strategy and we are seeing positive momentum, with robust loan book and deposit growth.
Mmegi: Your financials note particular growth nodes in areas such as agriculture, mining and construction. Kindly share more on where you are spotting opportunities here?
Makhupe: Mining sector is the cornerstone of Botswana’s economic growth. Botswana has diverse commodities spanning from diamonds, copper, coal, soda ash, nickel, etc. However, diamonds are key to the sector and Botswana revenue generation. Therefore, aligning with blue chip sector players is imperative for the sustainability for our business. The drive and strategy for the Bank is to support the mining ecosystem and partnership through Citizen Economic Empowerment Programme (CEEP) initiatives.
Bank Gaborone recognizes the importance of all sectors in Botswana’s economic development. Opportunities include:
• Agriculture: Increased demand for agri-financing, irrigation infrastructure, and value chain support for local farmers.
• Mining: Funding opportunities in mining services, supplier financing, and citizen economic empowerment programs supporting mining houses.
• Construction: Growth in real estate development, government infrastructure projects, and mortgage lending.
These sectors align with our strategic growth priorities, enabling us to provide tailored financing solutions.
Mmegi: The mining sector is one that is fraught with cyclical challenges. In fact, some banks have washed their hands of sectors such as diamonds. How is Bank Gaborone approaching these dynamics?
Makhupe: Bank Gaborone’s focus and intermediation has always been skewed towards the diamond ecosystem for considerable amount of time. With the current challenges, the Bank continues to support the sector through partnerships with other mining houses to diversify its value proposition.
During this predicament, we stayed close to our clients with constant engagements to understand key challenges and walked the journey with them. Bank Gaborone’s key pillar is to be a relationship bank and that entails doing more for our clients as their financial advisor, we are committed to staying the course with our clients, as through cyclical challenges.
In every route that we take, we are anchored by our commitment to customers. When we are in a relationship with a party, when they go through tough times, we don’t leave them; we have committed to go through these times with them. Even in diamonds, we have stayed close to our clients to get as much information as possible. We get feedback on what’s going on in the industry and how to mitigate these risks in the cycles.
We do recognise the cyclical nature of the mining industry and have adopted a risk-mitigated approach by:
• Diversifying mining exposure beyond diamonds to other minerals with growth potential.
• Leveraging partnerships with government and development finance institutions to de-risk mining investments.
Our targeted engagement in mining ensures that we support the sector without overexposing the bank to cyclical downturns.
Mmegi: What initiatives is Bank Gaborone involved in, around green financing and what can the market expect going forward?
Makhupe: Sustainability has been positioned as one of the prioritised strategic areas for Bank Gaborone, and we have established partnerships with some of the solar energy companies for sustainable agriculture solutions (Agrivolt). The business segments, Wholesale, Retail Banking and Treasury are working together to establish a pipeline and appetite for green sustainable funding in the market.
A vivid example of such an undertaking would be Bank Gaborone’s partnership with Botswana University of Agriculture and Natural Resources (BUAN) to fund the country's first agrivoltaics project. This innovative 1-megawatt solar installation not only supplies daytime power to the university—significantly reducing its electricity costs—but also integrates agricultural activities beneath the solar panels. By cultivating crops like tomatoes under the panels, the project maximizes land use, reduces soil moisture loss, and shields plants from extreme heat.
Additionally, the project incorporates a water recycling system that collects and reuses water for irrigation, further enhancing sustainability.
This collaboration exemplifies our commitment to sustainable development and showcases the potential of combining renewable energy with agriculture to address both energy and food security challenges.
