Figures from the Bank of Botswana made available this week, show that the commercial banks powered to net interest incomes of P7.5 billion last year, from P6.4 billion in 2023, helping the after-tax profits to a 30% year-on-year increase.
Non-interest income, which is commonly associated with the revenues from fees and commissions, amounted to nearly P4 billion, up about eight percent from 2023. Non-interest expenses, which involve all operating cost items such as salaries and maintaining the systems that run technology at the banks, reached P5.8 billion last year, up from P5.7 billion in 2023.
The country’s commercial banks were also able to restrain their bad and doubtful debts, which amounted to P221.2 million last year compared to P288.7 million in 2023. The improved control on bad debts came even as the banks were able to grow their loan books by P5.3 billion during 2024 to end the year at P87.1 billion.
The latest positive trends for banks were confirmed this week, as the listed banks all posted rosy financials for periods covering 2024.
The country’s largest bank by assets and footprint, First National Bank Botswana (FNBB0, posted a 14% increase in pretax profits for the six months to December 2024, notching P1.02 billion.
At Absa Bank Botswana, the country’s second largest bank, saw its pretax profits for the full year to December 2024, jump 27% to about P1.1 billion, while Standard Chartered Bank Botswana, enjoyed a 19% jump in pretax profits to P477.7 million. Stanbic Bank Botswana’s pretax profits for the year to December 2024 rose nearly 44% to P950 million.
The most impressive increases, however, were in the smaller banks, with BBS Bank recording a 260% jump in pretax profits last year, moving from a loss of P28.2 million to a positive P45.3 million.
Access Bank Botswana posted pretax profits of P134.6 million for the year ended December 2024, more than 157% higher than the corresponding period in 2023.
Bank Gaborone, meanwhile, saw its after-tax profits rise more than 85% to nearly 99 million Namibian Dollars for the half year to December 2024. Bank Gaborone is indirectly majority owned by Namibia’s Capricorn Group, a major regional investment holding company.
In a recent interview Bank Gaborone managing director, Olebile Makhupe, told Mmegi that several trends were behind the resilience and growth of profits in the banking sector.
“The notable trends that keep this sector safe in troubled waters include Artificial Intelligence which is revolutionising banking operations, from fraud detection to personalised customer experiences. “There is also increasing compliance as regulatory demands are rising, requiring banks to invest more in risk management and compliance frameworks,” she said.
Makhupe added that the liberalisation of financial services means the sector is opening up, allowing for greater competition and innovation, which will significantly alter Botswana’s banking growth trajectory. Digitisation has also been a major game changer for banks.
“Customers are rapidly adopting online and mobile banking, reducing reliance on physical branches,” she said.
Bank profits could come under some pressure this year, due to a liquidity crunch which could impede their lending activities.
In December, the Bank of Botswana released about P1.8 billion to banks, as liquidity dried up in the market because of a slowdown in government spending related to the prolonged diamond slump.
The situation has not abated this year and could intensify as government digs deeper into the capital market for debt to finance the P22.1 billion deficit expected in the 2025–2026 financial year.
FNBB chief financial officer, Mbako Mbo, described the liquidity squeeze as “unprecedented”.
“We are seeing some unprecedented levels of liquidity squeeze,” he said at a recent results briefing. “The market is facing some headwinds and whilst we do not have a liquidity problem at FNBB, we have come up with very solid plans to manage that. “We will focus very diligently on our non-lending business whilst we continue to do our lending business on credit appetites that we will be adjusting as informed by economic realities.”
