Old Mutual ST Botswana started operating in 1994 and is 100% owned by Old Mutual Limited through Old Mutual Financial Services Botswana (Pty) Ltd, an intermediate non-operating holding company. Old Mutual Financial Services Botswana (Pty) Ltd also holds exclusive interests in Old Mutual Life Insurance Company (Botswana) (Pty) Ltd (“Old Mutual Life Botswana”) and Old Mutual Investment Group Botswana Proprietary Limited. The three Botswana domiciled subsidiaries form a strategically significant corporate structure under one parent, although the financials for Old Mutual ST Botswana are consolidated at Old Mutual Limited (“group”) level. Given the limited contribution of Old Mutual ST Botswana to the group’s revenue and total assets of less than 1% for each category, the entity’s credit profile is assessed on a stand-alone basis.
Botswana’s banking sector comprises 10 commercial banks and three statutory banks, namely the Botswana Savings Bank, Botswana Building Society and National Development Bank (“NDB”). All of the commercial banks operating in Botswana are subsidiaries of major regional or international banking groups, and therefore, are subject to significant external direction. The sector is dominated by four commercial banks (Standard Chartered Bank Botswana Limited, First National Bank of Botswana Limited, Stanbic Bank Botswana Limited, and Absa Bank Botswana Limited), with a combined market share of about 80% in terms of both total commercial bank assets and deposits. The stability and franchise of these institutions pose a threat on smaller banks’ ability to grow market share.