Standard Chartered defies market headwinds with strong returns

Standard Chartered Botswana delivered a robust financial performance for the full year 2025, successfully navigating a challenging economic landscape while reinforcing its commitment to long-term shareholder value. The bank surpassed its Return on Tangible Equity (ROTE) target of 25%, achieving a notable 26% despite persistent market pressures. Total income for the year declined 11% year-over-year to P950.8 million.

Net interest income contracted sharply by 13%, while non-funded income dipped slightly by 1%, accounting for 20.8% of total income. The downturn in earnings was primarily driven by squeezed margins on asset products, a consequence of rising funding costs amid tightening liquidity conditions in the market. Maintaining a rigorous focus on cost discipline, bolstered by continued digitization initiatives, the bank reduced operating expenses by 9% to P556.8 million.

This efficiency translated into a cost-to-income ratio of 59%, highlighting improved operational performance. Chief Executive Officer Mpho Masupe acknowledged the difficult operating environment, noting that profitability was pressured by volatile liquidity and broader macroeconomic challenges. He pointed to a one-off impairment charge arising from an accounting adjustment to reverse duplicated interest in suspense, stressing, “It was non-recurring and does not indicate any deterioration in asset quality or credit fundamentals.” Masupe reaffirmed the bank’s strategic priorities, emphasizing its commitment to prudent risk management, tight cost control, and capital preservation while positioning for future growth opportunities.

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He noted, “The ongoing sale of the Standard Chartered Botswana franchise reflects the underlying value of the business, its strong client relationships, brand strength, and skilled workforce.” Across business segments, performance remained steady despite subdued economic activity and tepid credit demand. The Wealth & Retail Banking division posted impressive growth in its wealth segment, with assets under management surging from BWP196 million to BWP544 million, a remarkable 179% increase. This aligns with the bank’s strategy to broaden its affluent and wealth offerings while diversifying revenue streams.

Conversely, the Corporate & Investment Banking segment saw a 5% decline in operating income to BWP328 million, impacted by lower fee income and elevated funding costs. Nevertheless, stringent cost controls drove a 52% reduction in expenses, lifting operating profit by 40% to BWP228 million before impairments and tax. Profit before tax edged up 1% to BWP187 million after credit impairments, underscoring resilience in core operations.

Looking forward, Masupe underscored the bank’s ongoing role as a global financial connector. He said, “We leverage our international network across Asia, Africa, and the Middle East to support clients through economic volatility while unlocking sustainable growth opportunities.”

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