The MD with a margin to mend

Tsaone Raboloko has taken the helm at Bank Gaborone as the Botswana lender seeks to rebuild profitability and reduce its reliance on institutional deposits after a liquidity squeeze drove up funding costs and eroded lending margins.

His appointment, effective 9 October, comes as the bank works to diversify its funding sources, strengthen credit quality and improve access to cheaper liquidity following a difficult financial year.

Raboloko, who has served as acting managing director since the end of June, joined Bank Gaborone in 2018 as head of risk and compliance before becoming chief financial officer in April 2022. His appointment follows the completion of the recruitment process and regulatory approval.

The leadership change comes after funding pressures and weakness in Botswana’s diamond sector weighed on the bank’s performance in the year to 30 June 2026.

Net interest income fell by 40.2%, while the net interest margin, the difference between interest earned on lending and interest paid on funding, relative to interest-earning assets, narrowed to 2.8% from 4.29% a year earlier.

Non-performing loans increased by 65.7%, while impairment charges rose by 91.5%, according to the bank’s annual report.

Bank Gaborone said liquidity shortages during the first half of the financial year pushed funding costs significantly higher as management prioritised balance-sheet stability over short-term profitability.

A shift in funding strategy

The bank is responding by seeking to grow retail deposits, diversify its funding sources and improve access to lower-cost liquidity.

Its reliance on institutional deposits became more pronounced during the period of tight liquidity, exposing the cost of its funding mix when competition for available funds intensified.

A broader deposit base could help reduce that exposure and give the bank greater stability in funding its lending activities. The success of the strategy, however, will depend on whether it can secure more competitive funding without compromising liquidity.

Bank Gaborone increased its liquid assets by 55.4% during the year, even as its lending margins came under pressure. Its gross loan book declined to P7 billion from P7.69 billion, while its share of Botswana’s lending market fell to 7.9% from 8.5%.

Liquidity conditions have since begun to improve, with the bank reporting that funding costs are moderating.

The task ahead

For Raboloko, the challenge is to turn that improvement into a sustained recovery in profitability while containing bad loans and maintaining a resilient balance sheet.

Rebuilding the net interest margin will be central to that effort. The bank must secure more stable, competitively priced deposits while managing credit risk in an economy whose diamond sector weakness has put pressure on borrowers.

The extent to which the funding reset restores margins, stabilises asset quality and supports renewed lending growth will provide an early measure of Raboloko’s tenure as managing director.