FirstRand Namibia, the parent company of FNB Bank has a N$1.58 billion profit in its 2019 end-year results, a 2,2 percent increase from N$1.55 billion recorded prior year.
“The impact of the challenging economic climate was certainly felt in the financial services sector. Credit demand showed improvement although it was still relatively low in comparison to the past few years”, says Oscar Capelao, Chief Financial Officer of FirstRand Namibia.
This comes as the group’s revenue cost to income ratio increased to 52.9 percent compared to 50.3% in 2018, which position which is remains commendable.
Cost growth was contained at 4.4 percent during the period under review, demonstrating the efficiency focus in the current year.
Return on average equity decreased to 20.8 percent compared to 22.1% prior year, in line with the long-term target range of 21 percent to 24 percent.
Headline earnings increased by 3.0 percent to N$ 1 071 million, while earnings per share increased to 409.9 cents.
“The group delivered resilient, high quality earnings on the back of reasonable topline growth, which has translated into a strong return profile and it is well-positioned for the continued emergence of the credit cycle. We will continue to be agile to respond to the many uncertainties that are likely to arise on the back of our continued prudent approach to doing business, where we do not chase market share at the expense of returns,” the group’s Finance Director said.
Net interest income grew by 10.5 percent from N$1 820.8 million in 2018 to N$2 012.2 million.
Interest expense increased by 5.1 percent, while interest income grew by 7.9 percent, attributed to subdued growth in advances during the year and the continued focus on growing retail deposits as opposed to the more expensive wholesale funding.
Normalised NIR increased by 3.8 percent, reflecting a fee and commission income growth of 4.8 percent, supported by higher volumes across digital and electronic channels.
“We continue to place a substantial amount of effort and resources into building an innovative financial services group that is centered on the customer of the future, putting the customer at the core of our operations. This goes beyond providing basic banking services, but rather creating an ecosystem that is the extension of a customer’s interaction with his ability to transact to his ability to create and growth his/her wealth”, said Sarel van Zyl, CEO of FirstRand Namibia.
“Leading financial services in Namibia while preparing for the future of banking, requires focus, determination, clarity of vision and a concerted daily drive to cut costs where appropriate. Our 2018-2019 results are a clear indicator of the team’s strong stewardship of our current resources in a challenging environment, a clear indicator of knowing where we are going – a leading, financially inclusive, profitable, end to end financial services offering, and a clear indicator of our ability to execute on our strategy efficiently year on year”.
“As FirstRand Namibia, we remain excited about the future, and our people and our energies are ready to take forward the vision of shared prosperity for all stakeholders. This we will do while creating our own ‘next’, by widening our reach digitally and through partnerships nationally, ensuring a continuous, functionally innovative, personalised basket of services to each of our segments, and through continued transformation of old costs into new opportunities.”