How Absa made its whooping P2.18 billion in revenue

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How Absa Bank Botswana Makes and Spends Its Money: A Breakdown for Young Entrepreneurs, Students, and Investors

Absa Bank Botswana plays a significant role in the country’s financial sector, and understanding how it generates and allocates its revenue can be beneficial for young entrepreneurs, students, and investors. Let’s break down its revenue and expenses in a way that helps you see potential opportunities.

1. How Absa Makes Money

Revenue Sources (P2.18 billion total revenue)

Retail and Business Banking: P1.58 billion

This is the bank’s biggest revenue stream, which includes personal loans, credit cards, and business loans.

 Corporate and Investment Banking: P601.19 million

This includes financing large businesses, investments, and corporate banking services.

Islamic Banking: P350,000

A small but growing segment catering to customers looking for Sharia-compliant banking solutions.

What This Means for You:

Young Entrepreneurs: If you are looking to finance your business, knowing that retail and business banking generate the most revenue means there are structured loans and financial products tailored for SMEs.

Students: Understanding banking products helps in making informed financial decisions, whether opening accounts, using credit responsibly, or seeking student-friendly financial solutions.

 Investors: The focus on business banking means the bank prioritizes loan disbursement, and this revenue stream could influence future growth.

2. How Absa Spends Money

Key Expenses (P1.44 billion total expenses)

General & Administrative Costs: P1.09 billion

This includes salaries, branch operations, and running day-to-day banking services.

Sales & Marketing: P24.55 million

The bank spends this on advertising and promotions to attract more customers.

Other Expenses: P324.39 million

Likely includes technology upgrades, compliance costs, and other operational needs.

Cost of Sales: P31.15 million

 Expenses directly related to delivering banking services, such as interest paid on deposits.

Earnings (Profit): P703.03 million

After expenses, Absa still makes a strong profit, showing it is a profitable and stable financial institution.

What This Means for You:

Young Entrepreneurs: If your business provides digital solutions, marketing, or financial consulting, the bank’s spending on operations and marketing could mean opportunities to offer services.

Students: Learning how banks manage money can improve financial literacy and prepare you for careers in finance, business, or fintech.

Investors: The profitability of the bank suggests that it remains a stable investment option.

Finally 

Absa Bank Botswana generates most of its money from personal and business banking, spends heavily on operational costs, and remains profitable. Understanding this financial flow can help you identify opportunities whether seeking funding, launching a financial tech startup, or investing in banking stocks.