Two commercial banks, Barclays Bank Botswana and Stanbic bank Botswana have decided to close some of their branches. The latter has since written to its customers to notify them of the pending closure of the Molepolole branch that is located at the Old Spar Mall while the former has since closed its Sowa Branch.
Finance and Development Planning, Kenneth Matambo recently confirmed in parliament t that Barclays Bank Botswana has closed its branch in Sowa Town. The closure is said to have been justified by the bank on commercial grounds.
Matambo said he was informed that the branch, which was closed in October 30 last year, was not profitable because it did not generate sufficient revenue to cover operating costs
“The bank concluded that the Sowa Town branch had limited growth potential,” Matambo said.
Parliament was further told that that consistent with regulatory requirements, Barclays Bank had notified its customers of the closure of the Sowa Town branch through advertorials in two widely circulated newspapers in Botswana, letters to individual customers of the branch and posters at the branch premises at least a month prior to the closure. The closure of the said banks comes several months after a period of reduced liquidity that rocked the banking sector in the country. As a result, leading banks including Standard Chartered Bank Botswana and First National Bank Botswana (FNBB) have warned of reduced profits for the period ended 31st December 2015.
In separate statements released to the capital markets recently, the Botswana Stock Exchange quoted banks attributed the reduced earnings to a challenging trading environment in the domestic market. Garry Juma, Motswedi Securities financial analyst, says the anticipated suppressed earnings do not come as a surprise, given the tough operating environment in the banking sector.
“The low interest rate environment and the decline in disposable income, which are reducing transaction volumes, are some of the challenges the banking sector has had to grapple with,” he said.