Absa Bank Botswana, the country’s second-largest bank by assets, reported a P1 billion profit before tax for the period for the first time ever. The bank attributed the strong performance to growth across all revenue lines.
Absa interim Finance Director, Leroy Klein, has attributed the institution’s robust financial performance to improved cost containment measures and stringent risk management protocols.
“Over the past three years, we have steadily improved our revenue base, demonstrating resilience and agility in response to market conditions,” Klein said when presenting Absa’s 2024 financial results.
The bank has over the years demonstrated consistent revenue growth, increasing from P2 billion in 2022 to P2.28 billion in 2024. This represents an 8 percent year-on-year increase and a 7 percent Compound Annual Growth Rate (CAGR) over the three-year period.
Klein said this consistent upward trajectory reflects Absa’s strategic focus on revenue diversification and improved customer engagement.
He explained that strong customer engagement and targeted product growth drove improved fee and commission income in Retail and Business Banking (RBB).
“Our focus on enhancing transactional banking platforms and expanding lending products was key to this growth. Thus, resulting in an 8 percent growth year on year revenue uplift,” Klein said.
Speaking on the bank’s Corporate and Investment Banking (CIB) segment, Klein said Absa’s strategic focus on deepening client relationships, coupled with enhanced digital solutions, resulted in strong growth in both lending and transactional services.
He said the 7 percent improvement in topline performance from 2023 is evidence of the continuous momentum.
“The strength of our revenue mix reinforces our ability to grow sustainably across all business segments,” he said.
Absa’s net interest income increased by 8 percent, which Klein said is a reflection of disciplined margin management and continued loan book growth.
“Despite a competitive lending environment, we successfully optimised asset yields while managing funding costs,” he said.
“This enabled us to capture lending growth opportunities, particularly in retail and commercial segments.”
The bank’s focus on expanding non-interest revenue also delivered positive results.
Fee and commission income improved year-on-year by 11 percent, supported by higher transactional volumes and improved product penetration.
Growth in card fees, digital transactions, and advisory services all contributed to this performance.
Klein said this diversified revenue base helps reduce reliance on interest income while enhancing overall resilience.
For Absa, managing credit risk effectively has been a key priority.
In 2022, impairments remained subdued, which the Absa Finance Director said was a reflection of pandemic-related releases still running off the book.
“By 2023, the increase reflected the normalisation of our impairment charge for a loan book of our size,” Klein said.
“In 2024, we only had a P13 million increase in our impairment charge for the year reflecting our proactive management of credit risk and a disciplined approach to lending. The loan loss ratio remained well within risk appetite at about 0.50 percent.”
The steady improvement over three years highlights Absa’s commitment to building a high-quality loan book.
Klein emphasised that the improved impairment position reflects enhanced customer engagement and proactive intervention strategies, which have reduced defaults.
“It shows strengthened credit monitoring processes that allow us to detect risks earlier and respond decisively,” he said.
“It also reflects prudent provisioning, ensuring we maintain adequate buffers while continuing to support customers facing financial difficulty.”
This improvement is regarded as a key factor in Absa’s ability to deliver sustainable growth and profitability.
Absa Bank Botswana Managing Director, Keabetswe Pheko-Moshagane, said the banking industry is observing enhanced regulatory monitoring driven by the need to maintain stability in an environment that presents volatility and uncertainty.
“Therefore, strategic positioning remains critical, not only to capitalise on the few opportunities but also to proactively manage associated risks,” she said.
“As Absa, these factors will continue to influence our agility and inform our strategic posturing. It is essential to assess the impact of these challenges on our operations, identify areas of strategic adaptation, and reinforce our resilience.”
As such, she said Absa’s strategy for 2025 is anchored in the sustained momentum the bank has built over the past few years, defending its market position and pursuing cautious growth.
