First National Bank of Botswana Limited (FNBB) has posted a robust financial performance for the six months ending December 31, 2024, despite facing macroeconomic headwinds, particularly in Botswana’s key diamond sector. The bank reported a 14% increase in profit before tax, reaching P1.0 billion, compared to P879 million in the previous year.
Key Financial Highlights
Profit Before Tax: Increased by 14% to P1.0 billion.
Return on Equity (ROE): Improved to 37.1% from 36.2%.
Cost-to-Income Ratio: Reduced to 46.3% from 47.6%, reflecting cost containment efforts.
Dividend Per Share: Increased to 18 thebe from 16 thebe.
Gross Advances to Customers: Grew by 9% to P20.6 billion.
Deposits: Increased by 12% to P29.3 billion.
Non-Performing Loans (NPL) Ratio: Improved to 3.5% from 4.5%, indicating better credit quality.
Botswana’s Economic Landscape and FNBB’s Strategic Positioning
Botswana’s economy faced significant challenges in 2024, with GDP contracting due to weak diamond sales and subdued global demand. The country’s dependency on diamond revenues has placed pressure on fiscal policies and government spending. FNBB has navigated these challenges by focusing on diversified revenue streams and strong risk management.
Segment Performance
Retail Banking: Strong growth in personal loans and eWallet transactions contributed to higher earnings.
Commercial and SME Banking: Lending grew by 12%, reflecting increased business activity.
Corporate Banking (RMB): Expanded by 18% as demand for structured financing rose.
Treasury & Investments: Investment securities grew by 32%, optimizing portfolio returns.
Operational Efficiency and Digital Transformation
FNBB continues to invest in digital banking solutions to enhance customer experience and operational efficiency. The bank recorded an 8% increase in customer numbers, with significant growth in mobile banking and digital transactions, including eWallet and CashPlus services.
Sustainability and Corporate Responsibility
FNBB has embedded sustainability as a core strategy, allocating P495 million towards sustainable finance initiatives. Key projects include:
SME Development: Support through financing and mentorship under the FirstPreneur SME Development Programme.
Green Finance: Disbursing P59.1 million in transition finance to support climate-conscious projects.
Financial Inclusion: Expanding CashPlus agents in remote areas.
Community Investments: Over P500,000 directed towards social impact initiatives, including education and arts development.
Looking Ahead
The bank remains cautiously optimistic, expecting a moderate economic recovery in 2025. Key drivers will include the rebound in diamond sales, government fiscal reforms, and completion of major infrastructure projects. FNBB will maintain a balanced approach to risk while continuing to invest in technology and customer-centric solutions.