Letshego Africa Holdings Limited reported stronger first-half 2026 profits for the six months ended 30 June 2026, despite a challenging business environment.
The half year results released earlier this week have presented the Group’s profit after tax 25 percent increase to P226.9 million, from P181 million in the same period last year.
This growth resulted from tighter cost controls and more prudent capital management, which helped offset lower income and ongoing pressure from higher funding costs.
Despite these pressures, Letshego’s performance was supported by stronger cost management, lower impairment charges and resilient results from its Southern African operations.
In Botswana, macroeconomic conditions remain under pressure because weak global diamond demand has reduced export revenues, fiscal inflows, and overall economic activity. This presented a widened fiscal deficit,tightened liquidity, and reliance on government financing increased, affecting the domestic financial system. Lending conditions have become more selective, reflecting tighter liquidity and lower demand, though ongoing policy measures are expected to support gradual stabilisation.
However, the Group’s revenue performance remained under pressure, as evidenced by the operating income which declined by 8 percent to P957.5 million, from P1.04 billion a year earlier. Net interest income was relatively stable at P764.1 million, down 1 percent, as higher borrowing costs continued to squeeze margins.
On the other hand, non-funded income declined by 28 percent to P193.4 million, primarily due to a one-time insurance adjustment that had benefited the prior year.
Despite all the mix, Letshego maintained a cautious lending approach, prioritising collections, recoveries, and management of non-performing loans. This reflects ongoing pressure on consumers and businesses due to elevated borrowing costs.
The Group reduced operating expenses by 7 percent to P525.4 million, compared to P565.9 million in the first half of 2025, mainly through lower staff and direct costs.
The cost-to-income ratio remained at 55 percent, indicating that savings primarily cushioned weaker income rather than significantly improving operating efficiency.
Despite all the mix, Letshego maintained a cautious lending approach, prioritising collections, recoveries, and management of non-performing loans. This reflects ongoing pressure on consumers and businesses due to elevated borrowing costs.
Meanwhile, a key priority for the Group is the proposed transaction involving its East and West African operations. Successful completion will streamline the Group’s portfolio and allow management to focus capital on core markets. In April 2026, the Group entered into a binding framework agreement with Axian Digital Venture Holding and Management Limited to sell its operations in Ghana, Nigeria, Rwanda, Tanzania, and Uganda. Shareholders approved the transaction on 19 June 2026, and the regulatory approval process is now underway in the affected markets.
These first-half results indicated that cost discipline and tighter risk management are helping Letshego navigate a difficult cycle. The challenge will be converting these efficiency gains into sustainable revenue and earnings growth as market conditions improve.
Group Chairperson Christopher Mokgware stated that the performance reflects disciplined cost and capital management as Letshego advances its strategic repositioning. For her comment, Group Chief Executive Officer Reinette van der Merwe added that the focus remains on strengthening the balance sheet and building a more resilient, digitally enabled business.
Looking ahead, the Group will focus on strengthening its balance sheet, improving capital efficiency, and allocating resources to markets and opportunities with stronger returns.
