Against the backdrop of Botswana’s slow-growing economy, Absa Bank Botswana said it is keeping a tight grip on its revenue.
Revenue in a Squeeze
Even as costs rise—both the expense of attracting customer deposits and operating expenses—Absa’s total income nudged up a fraction, 0.3%, in the first half of 2025.
- Total income: P1.125 billion, up slightly from P1.122 billion
- Fees and commissions: +8%, reaching P265.91 million
- Net interest income: P754.78 million, down slightly from P760.74 million due to higher deposit costs
- Core business: Loans still account for nearly 70% of revenue
“We have delivered over one billion in revenue for the first half of the year, supported by prudent credit risk management aligned to the evolving market volatility,”
said Managing Director Ms Keabetswe Pheko-Moshagane during results presentation.
Profit Under Pressure
Margins did not escape the squeeze: expected credit losses rose to P66 million, and operating expenses jumped 16% to P646.6 million. The result: profit before tax fell 27%, from P562.57 million to P412.34 million.
Read: Absa Retail: Steady at the Top, Investors Turn Attention To Rising Bad Loans
Yet, Ms Pheko-Mosahagane stressed that steady revenue is the bank’s immediate goal.
“When you make strategic choices, you have to look at the bigger picture,”
she said.
The Bigger Picture
Ms Pheko-Mosahagane put the question bluntly:
“Do you know the key factors that are influencing your strategic choices, right?” She urged her audience to zoom out and consider the past decade, rather than just today’s numbers.
Over those 10 years, Botswana’s economy has grown at an average of just 2.6%, she said. For a country that once leaned heavily on diamonds, this is not just a slowdown—it’s a signal.
You’ve got to look at the economy changes and say to what extent it’s structural and to what extent it’s cyclical,”
she explained.
And the answer, in her view, is clear: the problems are largely structural.
The diamond sector illustrates the point. Even if sales rebound, the MD warned, “they will never recover to the values and volumes we used to enjoy.”
That reality is reshaping not only government policy but also the way banks like Absa must think about growth in Botswana.
Finding Opportunity Amid Change
In this environment, Absa is not retreating but refocusing. Its lending strategy targets sectors with enduring demand and those central to economic diversification:
- Essential needs sectors: Stable, resilient areas that remain vital regardless of economic cycles
- Diversification-focused sectors: Industries critical to Botswana’s long-term growth
- Other focus areas: Agriculture, tourism, wholesale, and trading
“We believe these sectors will continue to be key areas in which we need to be active and provide support,” Ms Pheko-Mosahagane said.
Related: Absa Seeks Cheaper Money as Shareholders’ Profits Decline, Absa MD Explains Dividend Pause
