Standard Chartered Bank Botswana increased profit before tax by 22% to P171.3 million in the six months ended 30 June 2026, despite a decline in operating income as higher funding costs and subdued retail lending continued to pressure the bank’s core interest income.
The bank’s profit before tax rose from P139.9 million in the first half of 2025, while profit for the period increased to P129.6 million from P107.9 million. The stronger bottom-line performance was supported by a sharp reduction in credit impairment charges and higher non-interest income.
Standard Chartered’s operating income, however, fell 3% year-on-year to P470.7 million, largely because net interest income declined 14% to P352.6 million. The bank said elevated funding costs and subdued lending activity in its Wealth and Retail Banking (WRB) business continued to weigh on margins.
The pressure is visible in the bank’s net interest margin, which declined to 4.3% from 5.0% a year earlier. While the gross yield on interest-earning assets improved from 6.8% to 7.9%, the rate paid on interest-bearing liabilities almost doubled to 5.6% from 2.9%.
The decline in interest income was partly offset by a substantial improvement in non-funded income. Non-interest income increased 64% year-on-year, driven largely by stronger foreign exchange performance and trading income. Its contribution to total operating income increased from 15% to 25%.
The bank also kept a tight lid on costs, with operating expenses increasing by only 1% to P291.1 million. This resulted in a cost-to-income ratio of 61.8%.
A major factor behind the increase in profitability was the sharp decline in credit impairment charges, which fell to P8.4 million from P55.9 million in the prior-year period. Standard Chartered said the significantly lower impairment charge was partly due to the non-recurrence of a one-off accounting correction recorded in 2025.
The strongest contribution came from Corporate and Investment Banking (CIB), which effectively carried the group’s first-half performance.
CIB’s profit before tax jumped to P145.7 million from P38 million a year earlier, while its total income increased 64% to P233 million. Operating profit rose 82% to P151.4 million.
The segment’s loans and advances more than doubled, increasing 102% year-on-year to P2.4 billion. The growth was driven by increased utilisation of trade and financing facilities and greater exposure to the government and energy sectors.
CIB’s stronger performance helped offset weakness in the bank’s retail-facing business.
WRB profit before tax declined to P25.6 million from P101.9 million in the first half of 2025. Customer loans fell 10.3%, while customer deposits declined 11%, as the bank continued to take a cautious approach to lending amid economic uncertainty.
The segment’s impairment charge nevertheless improved by 76% to P2.6 million, while wealth assets under management increased 38% year-on-year, supported by client interest in Botswana Government Bonds and offshore investment products.
At group level, net loans and advances to customers increased 5% to P8.9 billion. The bank’s loan book was also characterised by relatively low non-performing loans, with management reporting a non-performing loan ratio of 1.1%.
Customer deposits, meanwhile, fell 10% to P12.8 billion as the bank deliberately reduced higher-cost funding and optimised its funding position. The advances-to-deposits ratio consequently increased to 69.5%, from 59.2% a year earlier.
Standard Chartered also strengthened its capital position during the period. Its capital adequacy ratio rose to 18.7%, well above the regulatory threshold of 12.5%, compared with 15.2% in June 2025. Total capital increased to P1.32 billion from P1.13 billion.
The results come as Botswana’s economy begins to recover from two consecutive years of contraction. The bank said GDP growth had returned to positive territory, supported by mining, the diamond value chain, manufacturing, electricity generation and retail trade, although inflationary pressures and subdued private-sector activity continued to weigh on the economy.
The bank reported that inflation had reached 10.7% in June 2026, largely driven by higher fuel and transport costs.
The results also come during a significant transition for Standard Chartered Botswana. The bank said the proposed sale of its Botswana franchise remains a key strategic priority, with engagements with relevant stakeholders continuing.
“Constructive engagements” are ongoing around the proposed sale, according to management, which said its focus remains on business continuity, client service and protecting the franchise during the transition.
For the second half of 2026, the bank said it will focus on accelerating growth across both CIB and WRB, deepening client relationships, maintaining balance-sheet strength and continuing its disciplined approach to risk and costs.