Letshego Africa Holdings has reported a sharp divergence between its statutory results and underlying performance, with a consolidated loss after tax of BWP235.5 million for the year ended 31 December 2025 masking a 362% surge in profit from continuing operations. According to the group’s unaudited financial results, the loss was driven almost entirely by a BWP519.5 million loss from discontinued operations following a board-approved plan to sell business interests in Ghana, Tanzania, Rwanda, Nigeria and Uganda.
These operations were classified as a disposal group held for sale under IFRS 5, triggering a non-cash impairment of BWP570.7 million that does not reflect the underlying health of those businesses, which the group said continued to show improvements in profitability, collections and deposit growth.
The core continuing operations, comprising primarily the group’s Southern African franchises, delivered a profit after tax of BWP284 million, up from BWP61.4 million in 2024. According to the official investor release from Letshego Africa Holdings, operating income rose 8% to BWP2 billion, supported by growth in deduction-at-source lending activity in Namibia and Mozambique alongside stronger insurance contributions. Net interest income increased 3% to BWP1.47 billion, while non-funded income climbed 26% to BWP552.8 million, reflecting the group’s success in diversifying revenue streams beyond traditional lending.
The most striking improvement came in credit quality. Net impairments fell 77% to BWP124.8 million, down from BWP533.6 million in 2024, as the group continued to clean up legacy non-performing portfolios and tighten underwriting standards. The loan loss ratio improved to 1%, a dramatic reduction from 4.5% in the prior year, representing the lowest level in the group’s recent history. Basic earnings per share from continuing operations turned positive, rising to 9.4 thebe from a loss of 0.1 thebe in 2024.
Group chief executive Reinette van der Merwe was quoted in the release as stating that the results demonstrate disciplined execution and clear improvements in earnings quality, credit performance and funding resilience, with the underlying performance robust and improving despite the accounting adjustments linked to portfolio optimisation.
Southern Africa remained the anchor of the group’s recovery. Mozambique delivered a 56% increase in profit after tax, supported by strong deposit mobilisation and a 77% reduction in impairments. Namibia recorded a 24% rise in profit after tax, driven by expanded digital product offerings and enhanced insurance income. Botswana, the group’s home market, delivered a 23% increase in profit after tax alongside a 59% decline in net impairments and a return to loan growth after several years of contraction.
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These three markets together account for more than 60% of the group’s net advances and represent the core of Letshego’s go-forward strategy following the planned exit from East and West Africa.
The group also made meaningful progress in strengthening its funding profile. Customer deposits from continuing operations grew to BWP2.2 billion, while total deposits including the disposal group reached BWP3.5 billion, a 64% increase year-on-year. Borrowings declined by 16% as the group rebalanced its funding mix away from wholesale obligations towards local deposits. This shift is particularly significant given tight domestic liquidity conditions in Botswana, where higher funding costs and the July 2025 Pula exchange rate adjustment have required close monitoring. The group’s cost-to-income ratio rose to 60% from 52%, driven partly by restructuring costs and normalised staff increases, a metric the group has flagged for improvement in the coming year.
The strategic review of the East and West Africa portfolio remains ongoing, with the group having classified those operations as held for sale during the second half of 2025. Management has outlined key execution priorities for 2026, including defending and strengthening the deduction-at-source franchise, scaling short-term credit solutions through digital channels, accelerating deposit growth and driving operational efficiency through cost discipline and improved collections.
The target operating model is under review in light of the ongoing corporate actions affecting the East and West Africa operations. While macroeconomic and liquidity pressures persist in certain markets, the group has positioned itself for more sustainable, risk-adjusted returns, underpinned by a clearer portfolio focus and a strengthened operational foundation.
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