Imara Capital Securities, a stockbroker, said First National Bank Botswana’s (FNBB) share price could climb to P6.53, nearly 20% above its current price of P5.45. On that basis, the firm recommends a buy.
So Expensive
Imara’s research suggests FNBB is pricier than most regional peers. The stock trades at:
- 9.6 times its earnings (vs. 8.3 for the region)
- 3.1 times its book value (vs. 1.6 for the region)
Read: Is FNBB’s Acacia Your Safer Shade During Banking Headwinds?
The Liquidity Squeeze
FNBB’s earnings grew in 2025 even as money in the system dried up. Diamond revenues — Botswana’s main source of cash — shrank, forcing banks to battle for deposits, which banks use to lend out money to customers. Big investors, like pension funds, demanded higher interest rates to park money (deposits) in banks, making this money costly.
Read: Money Is Expensive, How it Costs You As An Investor
FNBB noted that while these higher costs began to take effect this year, the impact was still manageable. FNBB allowed P3.5 billion of pricey deposits to run off, instead chasing cheaper ones.
Read: FNBB Turns to Billions of the Unbanked to Power Shareholder Earnings
The bank raised its prime lending rate—the interest rate it charges on loans—to 7.01% in July 2025, up from 6.01%, in order to balance risk and reward.
Lending Growth vs. Household Strain
This helped net interest income — the margin left after paying for deposits — to rise 6.1% to P2.0 billion. Lending volumes surged 11.5% to P20.7 billion, showing strong appetite across households, businesses, and corporates. But FNBB is worried lending might slow in an economy expected to contract.
Read: FNB Botswana Shareholders Embrace a Cautious Lending Era
But Imara cautioned that raising rates is a double-edged sword:
- Upside: protects profit margins and cushions liquidity risk.
- Downside: “More expensive loans could dampen credit demand in retail and SME segments and increase repayment stress, raising the risk of higher impairments.”
Here, FNBB’s balance matters: its fee-driven income and broad loan book give it a safety net.
Fees: The Unsung Hero
Non-interest income — money earned outside of loans — now makes up 48.67% of operating income (up from 45.62%) and is sufficient to cover all operating costs.
Read: FNB Botswana and the 90% philosophy
Read: Bank Charges Help FNBB Hold Ground, But CEO cautions investors
For FNBB, this underscores the value of its fee-driven income streams and a well-balanced loan portfolio across retail, corporate, and commercial segments, which help mitigate reliance on rate-sensitive lending,” .
Imara said
Slower Profit, Smaller Dividend
Profits grew too, but more modestly:
- Profit before tax: up 5.8% to P1.88 billion
- Profit after tax: up 4.1% to P1.44 billion
Read: FNB Botswana profit steady, but dividend falls
The Road to 2030
FNBB has closed its 2020–2025 strategy and is now mapping towards 2030. The focus is:
- Embedding tech deeper in operations
- Expanding financial inclusion
- Fortifying resilience
Digital tools like eWallet and CashPlus continue to scale, boosting volumes and values.
Read: Mr. Bogatsu Promises FNB to ‘Protect or Outperform Shareholder Returns,
Diversified revenue model reduces FNBB’s reliance on loan growth at a time when higher lending rates and tight liquidity could otherwise constrain profitability,”
Imara said.
Read: Investors Look Back at FNBB’s Strategy, Proving Resilience in Tough Times
