First National Bank of Botswana Limited (FNBB) kept half-year profits broadly flat as a surge in credit impairments offset strong growth in non-interest income, underscoring the strain Botswana’s weak economic cycle continues to place on lenders.
For the six months ended 31 December 2025, profit before tax came in at about P1 billion, dropping by 0.3% from the prior year. The board declared an interim dividend of 15 thebe per share, down from 18 thebe previously, signalling a more cautious stance as risks in the operating environment persist
FNBB’s results land against a backdrop of an economy that only recently emerged from a six-quarter contraction. A temporary rebound in the third quarter of 2025 was driven largely by a spike in diamond production ahead of planned maintenance, but structural concerns remain.
The bank’s own economic outlook for Botswana notes that while inflation averaged below 3% last year, upward pressure from utilities, fuel and imported goods could push price growth higher in 2026, even if it remains within the central bank’s target range. At the same time, the economy’s heavy dependence on diamonds and the longer-term threat from lab-grown alternatives and global demand uncertainty continue to cloud the recovery path.
It is within this context that the bank sharply increased its impairment provisions to P220.6 million from just P7.6 million a year earlier. Management attributed the jump largely to forward-looking macroeconomic assumptions rather than widespread distress in its loan book, but the move highlights how cautious lenders have become.
Gross advances to customers grew 4% year-on-year to P21.6 billion, with corporate lending up 10%, commercial up 8% and retail advancing 2%. Deposits from customers increased 2% to P25.7 billion
The strain on traditional lending income was offset by a sharp rise in non-interest revenue, which climbed 47% to P1.3 billion. The bank benefited from increased foreign exchange trading activity amid global volatility, as well as higher transaction volumes across digital channels such as eWallet (10% transaction growth) and CashPlus (24% transaction growth).
That diversification helped stabilise overall earnings, reinforcing the importance of transactional banking and treasury operations at a time when credit growth remains subdued.
Operating costs increased during the period, partly due to once-off voluntary separation payments as the bank advances a three-year labour restructuring plan. Excluding these, expense growth was more contained, and the cost-to-income ratio improved to 44.6%.
The bank’s capital position strengthened, with its capital adequacy ratio rising to 20.8%, comfortably above regulatory requirements. That buffer provides room to absorb shocks should economic conditions deteriorate further.