First National Bank of Botswana (FNBB) has reported a profit before tax of P2.15 billion, up from P1.91 billion in the previous financial year.
The bank also reported a 14% increase in annual profit to P1.65 billion for the year ended 30 June 2026, supported by strong growth in non-interest income despite mounting funding costs and higher credit impairments.
The strong bottom-line performance came largely from a 30% increase in non-interest income to P2.31 billion, helping the bank offset pressure on its traditional lending business. Net interest income before impairments declined by 2% to P1.91 billion as interest expenses surged 84% to nearly P981 million.
FNBB also experienced a sharp increase in credit impairments, which rose from P73.6 million in the previous year to P191 million. The bank said it had recognised an expected credit loss model overlay to account for elevated uncertainty and emerging credit risks arising from Botswana's economic and liquidity conditions.
Despite these pressures, the bank improved its operational efficiency, with its cost-to-income ratio declining to 45.4% from 47.5%. FNBB's return on average assets increased to 4.7%, while its return on equity remained strong at 33.2%.
The bank's balance sheet reflected a mixed lending environment. Gross advances to customers declined 4% to P20.6 billion, while customer deposits grew 7% to P28.3 billion. Its non-performing loan ratio increased slightly to 3% from 2.9%, while the credit loss ratio rose to 0.89% from 0.34%.
FNBB's total assets nevertheless increased 2% to P35.65 billion, driven partly by a 15% increase in investment securities to P12.46 billion. Total equity grew by 20% to P5.38 billion, while the bank's capital adequacy ratio strengthened to 21.7% from 19.2%.
Corporate banking emerged as the bank's most profitable customer-facing segment, generating profit before direct taxation of P904.8 million, followed by the retail segment at P671.6 million and commercial banking at P408.5 million. Corporate banking also recorded non-interest income of P854.9 million during the year.
Shareholders are set to benefit from the improved performance, with FNBB declaring a final dividend of 30 thebe per share, double the 15 thebe paid for the previous year. Together with the interim dividend, the total dividend for the year amounts to 45 thebe per share, representing a 36% increase from 33 thebe in the previous financial year.
The final dividend is expected to be paid on or around 16 October 2026 to shareholders registered by 6 October 2026.