Financial Highlights
The Board of Directors of Letshego Africa Holdings Limited (“Letshego” or “the Group”) presents an extract of the unaudited consolidated financial results for the six months ended 30 June 2026 (“HY2026”).
Letshego delivered improved profit after tax in the first half of 2026 despite continued pressure on income, margins and funding costs. This performance reflects disciplined cost and capital management as the Group advances its strategic repositioning – simplifying the portfolio, improving capital efficiency and focusing on markets with sustainable return potential, while protecting customers, employees and long-term shareholder value.
Christopher Mokgware
Group Chairperson
Focused execution and sustained cost discipline supported improved profitability in the first half of 2026, despite constrained revenue and challenging market conditions. We continued to strengthen collections, manage credit risk, optimise productivity and maintain prudent origination. Looking ahead, our focus remains on strengthening the balance sheet, enhancing return on capital and building a more focused, resilient and digitally enabled business.
Reinette van der Merwe
Group Chief Executive Officer
Proposed Transaction
In April 2026, the Group entered into a binding framework agreement with Axian Digital Venture Holding and Management Limited for the proposed sale of its operations in Ghana, Nigeria, Rwanda, Tanzania and Uganda. Shareholders approved the proposed transaction on 19 June 2026, after which the regulatory approval process commenced in the affected markets.While the proposed transaction remains subject to the fulfilment or, where applicable, waiver of certain conditions precedent, it represents an important step in Letshego’s portfolio optimisation strategy. It is a deliberate repositioning intended to focus capital, liquidity and management attention on markets where the Group can achieve greater scale, stronger profitability and improved risk-adjusted returns. Protecting customers, employees and operational continuity remain central objectives as the process unfolds.
Executive Overview
The first half of 2026 marked a period of continued transition for Letshego, as the Group advanced key strategic priorities while maintaining tight control over costs, risk and capital deployment. While the operating environment remained challenging, with pressure on income, margins and funding costs across some markets, the Group continued to make progress on its strategic objectives and strengthen the foundations for more sustainable performance.
Management remained focused on improving collections and recoveries, managing non-performing loans, optimising sales productivity and maintaining a measured approach to new credit origination. This was supported by continued cost discipline and deliberate actions across the business to simplify operations, manage expenditure and preserve capacity for targeted strategic investment. Together, these measures reduced operating expenses, strengthened operating resilience and supported improved profitability despite constrained revenue growth and continued market pressure.
Across the Group, the focus remains on allocating capital to higher-return opportunities and markets where Letshego has stronger scale, competitive positioning and sustainable return potential.
Strategic Focus
Letshego’s priorities remain clear: successfully conclude the proposed transaction involving its East and West African operations, strengthen the balance sheet, improve capital allocation efficiency, support higher-return opportunities in core markets and continue building a more resilient, digitally enabled business. While market conditions are expected to remain challenging, the Group’s first-half performance demonstrates progress relative to its strategy with the benefits of disciplined execution through a period of change.
Macroeconomic Insights
Letshego entered the first half of 2026 against a backdrop of continued macroeconomic uncertainty. Across the Group’s operating markets, conditions were shaped by a combination of external and structural drivers which moderated operating performance despite underlying growth resilience.
Sub-Saharan Africa’s economic activity remained broadly resilient over the reporting period, building on the stabilisation achieved through 2025, when regional real GDP growth reached approximately 4.5%. The emergence of new external shocks, however, weighed on performance across the region. The escalation of geopolitical tensions in the Middle East contributed to higher commodity prices and disruptions to trade, remittances and financing flows. At the same time, declining official development assistance, elevated debt-servicing burdens and tighter global financial conditions continued to constrain fiscal budgets and investment across many economies. These dynamics contributed to a firming in inflation across several markets.
Within this context, country-level performance remained uneven, with some markets experiencing more pronounced pressures or adjustment dynamics than others.
In Botswana, macroeconomic conditions remained under pressure owing to continued softness in global diamond demand, which has weighed on export revenues, fiscal inflows and broader economic activity. This has contributed to widening fiscal deficits, tighter liquidity conditions and increased reliance on government financing, with spill-over effects across the domestic financial system. Within this environment, lending conditions have remained more selective, reflecting tighter system liquidity and moderated demand, although ongoing policy actions are expected to support gradual stabilisation.
In Ghana, macroeconomic conditions continued to reflect a stabilisation and recovery phase, underpinned by fiscal consolidation and improving inflation dynamics following prior volatility. While external financing conditions remain constrained and exposure to commodity price movements persists, the operating environment has shown signs of improving macroeconomic balance and strengthening confidence, contributing to a more stable lending environment.
Across the region, borrowing costs remained elevated, funding conditions were tight in certain markets and pressure on household disposable income continued to affect customer demand, repayment behaviour and sales momentum. These conditions reinforced the importance of disciplined capital allocation, strong credit-risk management and operational efficiency.
Financial Performance Overview
Group Profitability
The Group delivered improved profitability for the first half of 2026, with consolidated profit after tax of BWP226.9 million, 25% above the prior period (HY2025: BWP181.0 million). Profit after tax from continuing operations increased by 5% to BWP179.9 million (HY2025: BWP171.3 million), while discontinued operations contributed BWP47.1 million (HY2025: BWP9.7 million). The continuing operations result was supported by resilient performance across the Southern African portfolio, materially lower impairment charges and continued cost discipline.
Operating Income
Operating income declined by 8% to BWP957.5 million (HY2025: BWP1,038.1 million), reflecting subdued lending activity and continued pressure on margins across some markets. Net interest income of BWP764.1 million was broadly stable, 1% below the prior period (HY2025: BWP768.4 million), as elevated borrowing costs continued to weigh on margins. Non-funded income declined by 28% to BWP193.4 million (HY2025: BWP269.7 million), due to a once-off insurance adjustment passed in the previous year partly relating to 2024. The Group remains focused on rebuilding quality business volumes while maintaining pricing discipline.
Operating Expenses
Total operating expenses decreased by 7% to BWP525.4 million (HY2025: BWP565.9 million), reflecting the continued benefits of cost-optimisation initiatives, disciplined expenditure management and ongoing simplification of operations across the Group. The reduction was driven principally by lower staff and direct costs.
The cost-to-income ratio remained stable at 55% (HY2025: 55%), with cost savings largely offsetting the impact of lower operating income. Cost discipline continues to be a key pillar of the Group’s strategy.
Effective Tax Rate
The effective tax rate (ETR) for continuing operations improved marginally to 55% for the six months ended June 2026 (HY2025: 56%). The tax charge increased to BWP220 million (HY2025: BWP215 million), reflecting the geographic mix of earnings and the tax treatment of income and expenses across the Group’s operating markets.
The ETR remained elevated relative to applicable statutory tax rates, primarily due to the partial derecognition of deferred tax assets following the expiry of carry-forward tax losses. This resulted in a reduction in the deferred tax asset balance and a corresponding increase in tax expense.
Withholding tax (WHT) on income received by the Holding company, including dividends from subsidiaries and preference-share income, also contributed to the current ETR. WHT on dividends increased to BWP55 million (HY25: BWP44.0 million) following higher dividend flows from subsidiaries. The related WHT is recognised as a tax expense and therefore increased the Group’s effective tax rate relative to the statutory rates.
Credit Performance
Net impairment charges of BWP32.6 million were 62% below the prior period (HY2025: BWP86.4 million), reflecting improved recoveries, strengthened collections effectiveness and a continued focus on portfolio quality. The loan loss ratio improved to 0.5% (HY2025: 1.4%). The Group maintained a measured approach to new credit origination, prioritising asset quality over volume growth.
Profitability and Returns
Profit before taxation increased by 4% to BWP399.5 million (HY2025: BWP385.8 million). Return on average equity increased marginally from 6% to 7% and return on average assets remained unchanged at 2%. Basic earnings per share from continuing operations increased by 5.3% to 6.0 thebe (HY2025: 5.7 thebe).
Balance Sheet and Capital
Total assets grew by 6% year-on-year to BWP19.7 billion. Compared with the prior period, net advances to customers of BWP11.5 billion and customer deposits of BWP2.5 billion were 18% and 6% below HY2025 respectively; these movements largely reflect the reclassification of the East and West African disposal group to assets held for sale (BWP3.8 billion) and liabilities directly associated with assets classified for sale (BWP3.0 billion) in line with IFRS 5.
On a like-for-like continuing-operations basis, net advances increased by 1% and customer deposits grew by 56%. This supports the Group’s strategy of strengthening local funding sources, reducing reliance on higher-cost wholesale funding and improving funding resilience.
Looking Ahead
Macroeconomic Outlook
Global growth is expected to moderate from approximately 3.4% in 2025 to 3.1% in 2026, while inflation is projected to increase to around 4.4%. A stronger US dollar and softer capital flows are also expected to maintain pressure on funding conditions in emerging markets.
For Sub-Saharan Africa, growth is expected to remain resilient at approximately 4.3% during 2026, although elevated debt levels, constrained external financing and reduced development assistance are likely to continue placing pressure on fiscal positions and domestic liquidity. Inflation is expected to rise towards 5%, reflecting currency movements and elevated input costs.
Geopolitical developments, particularly in the Middle East, remain a source of uncertainty through their effect on commodity prices, trade flows and financing conditions. Across Letshego’s markets, elevated borrowing costs and cost-of-living pressures are expected to continue affecting household affordability, liquidity and credit demand.
Against this backdrop, the Group will maintain a cautious risk posture during the second half of 2026, supported by refreshed liquidity stress testing, tighter affordability assessments, forward-looking macroeconomic overlays for provisioning, and continued monitoring of foreign-exchange and sovereign-concentration risks.
Strategic Outlook
Letshego remains focused on disciplined execution, selectively investing in core markets and opportunities capable of delivering sustainable, risk-adjusted growth.
Funding costs are expected to remain under pressure during the second half of the year. The Group will therefore continue to focus on deposit mobilisation, local funding resilience and balance sheet optimisation, while maintaining strict cost discipline across markets. Customer deposit growth provides an encouraging foundation for this strategy, although liquidity and interest-rate conditions will require continued monitoring.
The proposed transaction remains central to building a more focused and resilient Group. Subject to the required approvals and completion processes, it is expected to improve capital efficiency, strengthen financial flexibility and enable the Group to concentrate resources on markets and growth opportunities with stronger shareholder-return potential.
Management will continue to prioritise sales activity, product optimisation and customer engagement while maintaining a prudent approach to credit origination. The Group will also continue to focus on strengthening its core DAS business, improving collections and recoveries, and applying targeted measures to manage non-performing loans and elevated impairments.
Related Downloads
Letshego Africa Group HY2026 Unaudited Interim Condensed Consolidated Financial Statements.pdf
