Absa Bank Botswana reported a 27% decline in profit before tax to P412 million for the six months ended June 30, 2025, as higher operating expenses and elevated impairments offset modest income growth. This compares to P563 million recorded in the same period last year.
Total income edged up 0.3% to P1.13 billion (2024: P1.12 billion), supported by stronger fee and commission income, which grew 8% to P266 million on higher transaction volumes and new customer acquisitions. However, net trading income fell 10% to P102 million, while net interest income dipped 0.8% to P755 million.
Operating costs rose sharply by 15.6% to P647 million, driven by higher staff costs and general administration expenses linked to ongoing investments in people, systems, and regulatory compliance. The bank’s cost-to-income ratio worsened to 57.4%, up from 48.9% a year earlier.
Impairments also climbed by 16.9%, reflecting cautious provisioning amid a subdued economy. Consequently, total comprehensive income fell to P311 million from P433 million in 2024. Earnings per share dropped by 25% to 37.5 thebe.
At a segmental level, Retail and Business Banking revenue rose 3%, but profit before tax plunged 32% due to higher provisions. Corporate and Investment Banking posted a 14% decline in profit on weaker net interest and trading income, though impairments were contained.
The balance sheet remained stable, with total assets at P25.47 billion, broadly unchanged from last year. Customer deposits eased 2% to P18.9 billion, while loans and advances grew 4% to P18.2 billion. The bank’s capital adequacy ratio stood at 19.04%, comfortably above regulatory minimums despite the redemption of a USD 20 million subordinated debt instrument earlier in the year.
Absa maintained a robust liquidity position, reporting a liquid asset ratio of 13.24% versus the regulatory minimum of 10%. However, given the challenging operating environment, the board opted not to declare an interim dividend.
Looking ahead, Managing Director Keabetswe Pheko-Moshagane said the bank would prioritise prudent capital and liquidity management while supporting customers through a difficult macroeconomic period. “Our strategic focus remains on revenue diversification and innovative, customer-centric solutions aligned to Botswana’s national priorities,” she said.