Botswana Savings Bank (BSB) says its progress should not be measured by financial performance alone after its profit almost disappeared in the latest financial year, arguing that it used the period to consolidate a multiyear overhaul of the state-owned bank.
Acting Chief Executive Officer Dr. Wabo Moswate said BSB spent the year ended March 2026 consolidating changes made under its Lesedi transformation strategy while preparing for its next phase of growth.
“Importantly, our progress during the year cannot be measured by financial performance alone,” Moswate said in the bank’s 2026 annual report.
His comments come after BSB’s profit after tax fell to P405,000 from P76.8 million a year earlier, a decline the bank attributed largely to higher funding costs and fierce competition for deposits as liquidity tightened across the banking sector.
The pressure was most visible in BSB’s core interest business, with net interest income falling to P233.8 million from more than P312 million as the cost of funding the bank increased.
The bank’s Chief Financial Officer, Mike Dube, said the increase was driven “particularly by the cost of attracting and retaining deposits in an intensely competitive liquidity environment.”
Interest expenses jumped to P467 million from P284 million, far outpacing the increase in interest income, which reached P701 million during the year.
Against this backdrop, Dube said management responded by prioritising liquidity and capital rather than pursuing growth at any cost.
The strategy helped lift BSB’s liquidity ratio, a measure of its ability to meet short-term obligations, to 20 percent from about 11 percent, twice the Bank of Botswana’s regulatory minimum of 10 percent.
Cash and cash equivalents also increased to P285.6 million from P183.8 million, while administrative and general expenses fell to P92.4 million from P95.2 million despite continued investment in the bank’s transformation.
Under its Lesedi strategy, BSB expanded its balance sheet, increased its digital channels and introduced a broader range of banking products as it sought to transform itself from a traditional savings bank into a broader commercial and digitally enabled lender.
The bank said both its asset and deposit books grew from about P2.3 billion to around P4 billion over the strategy period, while it expanded into digital banking, agency banking, business banking, payments and insurance.
BSB now operates 11 branches, 18 ATMs and 64 active banking agents. It has also introduced online, mobile and USSD banking, investments that will be tested under its next strategy.
“The decline in net interest income and the significant reduction in fee and commission income demonstrate the need for greater earnings diversification, stronger funding stability and improved efficiency in the deployment of the bank’s balance sheet,” Dube said.
The bank will seek to address those weaknesses under Pinagare 2029, the strategy that succeeds Lesedi.
According to BSB, Pinagare will focus on deepening customer relationships, expanding SME and transactional banking and growing its digital, agency and payments businesses.
The bank also plans to diversify non-interest income, improve net interest margins, grow quality assets and maintain tighter control over costs.
After protecting liquidity and capital through a difficult year, Dube said the financial focus would now shift toward restoring sustainable profitability.
“The financial year ahead will consequently be about moving from resilience to performance,” he said.
