FirstRand Namibia 'Our efforts paid off'

FirstRand Namibia ended the six months to 31 December 2019 with a net profit of nearly N$623.8 million, an increase of around N$71 million or 12.9% compared to the same half-year in 2018.

The locally-listed group released its interim results on the Namibian Stock Exchange (NSX) yesterday, reporting net interest income of N$1.05 billion – about N$53.6 million or 5.4% more than the corresponding period in 2018.

Taking into account the impairment and fair value of credit advances of just more than N$118 million, the group's net interest income came in at about N$936.7 million, up nearly 6% year-on-year. Compared to the interim results of 2018, impairments increased by some 0.7%.

Non-interest income rose by about 7.4% to nearly N$1.005 billion. Operating expenses increased by approximately 4.3% to about N$1.06 billion during the period under review.



'Concerted efforts'

Commenting on the performance, FirstRand Namibia chief executive officer, Sarel van Zyl, said the group's “concerted efforts to manage our operating expenses, as well as our ongoing investment in the quality of our lending book over the past three years have started to pay off”.

FirstRand Namibia's total loan-book grew by nearly N$2.4 billion or 8.3% on an annual basis and stood at nearly N$31.5 billion at the end of 2019.

“The mix of FNB's advances growth reflects its targeted, segment-specific origination strategies. The focus has been to lend to main-banked clients, creating a strong reinforcement to the transactional relationship of our existing customer base,” the group said.

FirstRand Namibia reported basic earnings per share (EPS) of 236.9c – 28c per share or 13.4% more year-on-year. Headline earnings per share (HEPS), an indication of profitability, were 236.1c, an increase of 13.2% compared to same six months in 2018.

A dividend of 104c per share was declared compared to 91c in the prior corresponding period.



Outlook

Commenting on prospects, FirstRand Namibia said: “Given the structural nature of Namibia's challenges, the group believes that domestic economic activity will remain under pressure for the foreseeable future.”

“Weak domestic demand and low-income growth will continue to weigh on real GDP [gross domestic product] growth and core inflation, and the real economy remains constrained by high government indebtedness, and low private sector investment,” the group said. “FirstRand Namibia remains optimistic that, despite this difficult backdrop, it is executing on appropriate strategies to deliver ongoing growth in earnings and sustainable superior returns to shareholders,” FirstRand Namibia continued. According to the group, FNB's momentum is expected to continue on the back of customer and volume growth. “Cross-sell and up-sell strategies will deliver higher insurance revenues and good deposit and advances growth.”

RMB's client franchises are expected to remain resilient, FirstRand Namibia said.

“WesBank's performance is expected to remain subdued given underlying macro constraints, such as low vehicle sales,” the group added.



Jo-Maré Duddy –