Banks stay profitable, but expensive funding eats into Q1:2026 earnings

Botswana’s Banks Face Headwinds Despite Continued Profitability

Botswana’s banking sector maintained its profitability in the first quarter of 2026. However, rising operational costs and increased credit risk are creating a more challenging environment for lenders.

Profitability Declines Amid Rising Costs

Data from the Bank of Botswana indicates that the nation’s nine commercial banks recorded a combined net profit of P851.5 million for the three months ending in March. This represents a 13.8% decrease from the P988.1 million reported during the same period last year.

The Impact of Funding Expenses and Credit Risk

Increased funding costs are a significant factor impacting bank earnings. This, coupled with growing concerns over credit risk, suggests a tightening financial landscape for the industry.