The Bank of Namibia has given foreign-owned banks until the end of 2019 to comply with requirements that locals should hold at least 25 percent equity in commercial lenders operating in the country.
Governor Ipumbu Shiimi confirmed in a recent interview with the Windhoek Observer that to date, NedBank, Standard Bank, Bank BIC Namibia Limited of Angola, and Letshego Bank Namibia were either not compliant or partially compliant with the local shareholding requirement as stipulated by the Namibian Financial Sector Charter, developed and endorsed by the financial sector industry, and the Namibia Financial Sector Strategy.
Shiimi said one of the central bank’s conditions for granting banking licences to Letshego and Bank BIC Namibia in 2016 was that they should get local shareholders over time. “There are no Namibian shareholders yet, but one of the conditions was that they have to get a Namibian shareholder. We are giving them until 2019. They have also made a commitment in the Financial Sector Charter,” the governor said.
Only Namibia Stock Exchange (NSX)-listed FNB Namibia out of the five foreign-owned banks in Namibia, has fully complied with the local shareholding requirement, while Standard Bank Namibia has only transferred 10 percent equity to locals following a N$300 million empowerment deal in 2015, which saw the lender’s employees getting an eight percent stake, with the remaining two percent going to a community trust.
The Windhoek Observer reported last year that the Botswana Stock Exchange-listed Letshego Holdings had sold a 15 percent stake to Kumwe Investment Holdings, as part of measures to meet the local requirements.
Shiimi acknowledged that Letshego had secured a local partner, but was quick to add that the central bank was not yet sure of the lender’s current shareholding structure.
“I do not know where (Letshego) is now regarding their shareholding, but again they have to meet the same requirements. The minimum shareholding is up to 45 percent for new banks, but they have a period of four years after establishment to find local shareholders,” he said
Nedbank Namibia, which is majority-owned by Nedbank South Africa, is still to make any progress in terms of having locals as shareholders. Shiimi, however, said the central bank remains in close contact with Nedbank executives to ensure compliance.
“Yes, we are in close contact with them. They have made commitments; they are working on being ready to [comply]. We should perhaps wait.”
The Apex bank governor stressed that there is no legal requirement in place at the moment which forces foreign owned banks to have a Namibian shareholding. The requirements are contained in the Banking Institutions Amendment Bill, which is expected to be tabled in Parliament soon.
Responding to an enquiry from the Windhoek Observer this week, Nedbank’s Company Secretary, Saretha Louw, said the bank had met most of its targets, without elaborating.
“We are working on it (local ownership), in fact, this week it is being discussed. We have met most of our targets and we have indeed made a commitment before 2019,”she said.
Questions sent to Standard Bank’s Communication Manager Surihe Gaomas-Guchu, and Letshego’s CEO Ester Kali on Tuesday, went unanswered.