Banking sector profits down in the past 3 years- report
Bank of Botswana has disclosed that the level of banking profits has trended downwards over the last three years, reflecting increased operating costs resulting from investment in technology to adapt to the technologically advanced operating environment, as well as subdued income on account of the low interest- rate environment. According to the Banking Supervision 2021 annual report, the banking industry was liquid with the liquid assets to total deposits ratio ( LAR) remaining above the 10 percent minimum prudential requirement, at 16.6 percent, in December 31, 2021, a decrease from 19.1 percent in 2020. Statutory liquid assets declined by 9.1 percent from P15.4 billion in 2020 to P14 billion in 2021. “There was a notable improvement in the structure of the balance sheet of the banking sector, as long- term deposits constituted 52 percent, while short- term deposits accounted for 48 percent of total deposits. If this trend is sustained, the maturity mismatch risk, an enduring feature of the Botswana banking sector, will ease.”