Standard Chartered Bank Botswana reported a 25% decline in profit to P261 million for the year ended December 2025, as margin compression and a challenging liquidity environment weighed on earnings.
Operating income fell 11% to P950.8 million, driven primarily by a 13% drop in net interest income as higher funding costs squeezed margins. Non-interest income remained broadly flat, highlighting limited offset from fees and trading income amid subdued client activity.
Profit before tax declined 28% to P342 million, reflecting both weaker income and a swing in credit impairments to a P42 million charge from a net release in the prior year. The results were further impacted by a once-off impairment linked to an accounting adjustment, although management emphasised that underlying asset quality remains stable.
Despite revenue pressures, the bank maintained strong cost discipline, with operating expenses declining 9% to P556.8 million, supported by digitisation initiatives and efficiency gains. This helped contain the cost-to-income ratio at 59%.
The balance sheet remained resilient, with customer loans declining 3% to P7.9 billion as the bank adopted a more cautious lending approach, while deposits edged down 1% to P13.7 billion amid tight liquidity conditions. Capital adequacy remained strong at 17.2%, comfortably above regulatory requirements.
Segment performance was mixed: Corporate and Investment Banking delivered modest growth in profit before tax, supported by cost reductions, while Wealth and Retail Banking saw income decline as the bank continued to de-risk its portfolio and pivot towards wealth products.
Looking ahead, the bank flagged continued macroeconomic uncertainty but said it remains focused on cost discipline, risk management and capital preservation. It also confirmed that its parent company is progressing plans to sell the Botswana franchise, signalling a potential ownership transition in the near term.