When banks play it safe :: Mmegi Online

Local banks are toeing the right side of the green energy line, limiting their exposure to carbon emitting industries compared to other countries in the region. Will this stance frustrate local industrialisation efforts or actually boost returns for the banks, asks TIMOTHY LEWANIKA

Local banks have demonstrated their traditional resilience to shocks in the past years, maintaining a strong balance sheet of P145 billion as at May this year. The strong books were achieved through shrewd liquidity and risk management, something which has made the banking sector a cash cow in the economy even in trying times.

A recent climate transition report by the South African Reserve Bank (SARB), aiming to assess the financial sector’s exposure to carbon intensive industries found that Botswana had limited exposure to these risky industries. Carbon intensive industries are facing a global uproar due to their role in the climate crisis, with most global investment firms keeping their money away.

Already have an active account? Log in here.

Or Sign up and get unlimited access to premium articles.