Absa Bank Botswana delivered a strong first-half performance despite a subdued domestic economy, reporting an 18% increase in profit after tax to P376 million for the six months ended June 2026. Growth in non-interest income helped offset pressure on traditional lending revenues.
The lender’s total income rose 14% to P1.3 billion, while return on equity improved to 22% from 20.3% a year earlier.
The results come against a backdrop of a weak diamond market, fiscal constraints and lingering inflationary pressures that continue to weigh on the local economy. Absa noted that although economic recovery is gaining traction, mining output remains under pressure and inflation remains above target.
The bank’s earnings growth was increasingly driven by diversification rather than lending activity. Net interest income, the traditional engine of banking profitability, fell 4% to P727 million, while net fee and commission income rose 7% to P284 million. As a result, non-funded income accounted for 44% of revenue in the period, up from 33% a year earlier.
Customer lending remained largely flat. Loans and advances declined 1% to P18.1 billion, reflecting cautious credit demand and the bank’s disciplined approach to risk. Customer deposits, however, grew 4% to P19.8 billion, strengthening funding and liquidity positions.
Customer lending remained largely flat. Loans and advances declined 1% to P18.1 billion, reflecting cautious credit demand and the bank’s disciplined approach to risk. Customer deposits, however, grew 4% to P19.8 billion, strengthening funding and liquidity positions.
A more conservative view of credit risk weighed on the income statement. Expected credit losses doubled to P136 million from P67 million a year earlier, while the loan-loss ratio increased to 0.73% from 0.37%.
Even so, operating expenses were tightly controlled, rising just 4% to P671 million. This helped improve the cost-to-income ratio to 52.1% from 57.4% a year earlier, highlighting gains in operational efficiency. Profit before tax recovered to P481 million from P412 million in the corresponding period last year, while earnings per share climbed 21% to 46 thebe. Management said the first-half performance demonstrated the resilience of the franchise and validated its strategy of building a more diversified business.
Beyond traditional banking, the bank highlighted partnerships aimed at supporting local enterprise development, including financing initiatives that channel funding to small businesses and local suppliers. More than P96.6 million was extended to SMEs during the period, while over 2,100 participants benefited from capacity-building programmes.
With capital adequacy and liquidity ratios comfortably above regulatory requirements, Absa said it remains well positioned to support customers while pursuing growth opportunities as the country’s economic recovery gradually gathers pace.
