The Botswana banking sector has historically been characterised by high rates of profitability, which is often thought to be due to high bank lending interest rates and high spreads between deposit and lending rates. In this paper we examine whether this perception is true, by examining profitability, lending rates and spreads over the decade from 2007 to 2017 in Botswana and a range of other countries in the Southern African Development Community (SADC) and the East African Community (EAC). The analysis concludes that while the above characterisation of the Botswana banking sector was accurate in the early years of the period examined, it is no longer the case today. Profitability has declined substantially, and in 2016-17 was amongst the lowest in the ten countries reviewed. Average bank lending rates have also dropped significantly and are similarly now around the lowest in the country group. The deposit-lending spread has declined from its peak in 2009 and is now below the average (although not the lowest) for the countries reviewed. These changes have been associated with a dramatic improvement in the efficiency of financial intermediation, with banks now holding far fewer BoBCs and lending out a much greater proportion of deposits. Amongst the drivers of these changes are increased competition in the banking sector and lower policy interest rates. But despite increased competition, larger banks can still charge higher spreads than smaller banks. The bulk of the deposit-lending spread is now accounted for by operational costs and non-performing loans, rather than profit. Further reductions in spreads would therefore require more efficient banking operations (lower costs) and reduced loan losses.