The Bank of Namibia (BoN) has until 23 February to pronounce itself on the acquisition of EBank by FNB Namibia, in a deal that was announced in October last year.
According to BoN spokesperson, Dr Emma Haiyambo, the banking sector regulator, which has remained tight-lipped on the acquisition of Pointbreak and EBank, has up to three months to make a determination on the deal.
“The consideration of the application is still within the stipulated timeframe of the bank,” Iyambo said in responses to an inquiry made by the Windhoek Observer.
“This application was received on 23 November 2016 and the processing of such applications normally takes up to three months.”
The position of the apex bank comes amid indications that it also needs to take into account the recommendations of the South Africa Reserve Bank (SARB), which has a vested interested in the transaction, because of FNB South Africa’s significant shareholding in the dominant local banking group.
The BoN, the Namibian Competition Commission and the SARB are still to approve the mega deal, which has already received a nod from the Namibia Financial Institutions Supervisory Authority, according to insiders.
Those close to the coalface at Namfisa told the Windhoek Observer that the approval granted to the deal was not conditional, a position which could allow FNB Namibia to use its acquired Pointbreak asset management business to launch its Ashburton Investments brand locally, without any further regulatory challenges, after its initial efforts failed.
Pointbreak is a Namibian financial services group, providing investment management and wealth management services to the private, corporate and institutional markets.
It reportedly manages in excess of N$8 billion in third party capital.
Meanwhile, Haiyambo was buoyant on the local banking sector’s prospects this year.
“The banking sector is expected to continue to post good results and to remain financially stable. It is worth noting that the Namibian banking sector has been characterised by healthy profit levels, and adequate capital, for the period ending November 2016. Banking institutions remained resilient and maintained capital and liquidity at levels higher than the minimum of 10 percent set by the Bank of Namibia,” she said.
The BoN spokesperson said innovation will play a leading role in enhancing service delivery by the sector, thereby contributing to its growth.
“The banking sector is expected to continue employing innovative ways to enhance service delivery to customers. The adoption of innovation in the banking sector has resulted in banks engaging in technology-driven banking services, such as online banking and cellphone banking. These platforms have the potential to enhance financial inclusion and bring about efficiency in the delivery of banking services,” she said.
Haiyambo, however, said the central bank remained concerned about the over-indebtedness of borrowers and their ability to repay their loans.
“Generally, the bank is not concerned with lending by banks, per se, as banks are in the business of lending. However, the bank may have concerns with over-borrowing or over-indebtedness that can lead to the inability by borrowers to service their debt,” she said.
According to BoN figures, as at 30 November 2016, loans and advances on the balance sheet of banks stood at N$82,4 billion.
“BoN does not have a target level on loan growth. Banks are, however, required to have adequate risk management systems in place to manage credit risk. A key indicator by which the bank measures credit quality is the non-performing loans ratio (NPL),” Haiyambo said.
“As at the end of November 2016, the asset quality of banks continued to be good, with very low levels of NPLs, which stood at 1,8 percent, compared to the benchmark of 4 percent.”