By Mbatjiua Ngavirue
WINDHOEK
Chief Executive Officer of FNB Holdings, Vekuii Rukoro, has defended the bank’s fee structure saying FNB has no apologies to make to those who make use of “excess availment”, with regard to for example overdrafts.
“For the ordinary guy who does things according to the rules, our adjustment is only 4,8 percent, so we have done good,” he said speaking at the launch of the company’s annual report.
He was proud of the company’s Black Economic Empowerment deal, involving groups led by people such as Mwahafar Ndilula and Ranga Haikali, representing a broad-based group of public workers and teachers.
“We are not in the business of public relations or charity. They wanted value in exchange for value and that is what happened. These people are working their butts off to earn that money.”
The first tranche of share options, valued at N$17 million, was vested last year, with the second portion due to be vested in July this year.
Rukoro said the company ensured it paid market related salaries, which resulted in low staff turnover. He nevertheless quietly grumbled about a certain new cellphone company poaching FNB staff.
“They take our staff, because they know that with FNB they are getting the best – properly trained people.”
According to Rukoro, FNB spent N$4 million on in-house staff training during the past year, representing 2 percent of total payroll expenditure.
“Today we are a fully integrated financial services company. We are the only ones to have perfected the banc-assurance model in Namibia. What remains for us is to extract value and to achieve organic growth,” Rukoro said.
Rukoro said another key event for the company was the repositioning of its short-term insurance business.
It introduced the OUTsurance product line in July 2007, after selling 49% of Swabou Insurance to OUTsurance, thereby ensuring its commitment to the Namibian operation.
“We expect to achieve significant costs savings for the Group and clients, giving us a distinct competitive advantage.”
The company further sold 35 percent of Swabou Life to Momentum Life.
First National Bank of Namibia on Wednesday announced profit attributable to ordinary shareholders of N$303,2 million, up 19 percent from N$255,6 in 2006.
Chief Financial Officer, Gideon Cornelissen, reported that restructuring of the banking group’s capital base had a negative impact on earnings growth of around 2 percent.
This resulted directly from the issuing of N$260 million in bonds – qualifying as Tier 2 capital.
The positive effect of a 2 percent improvement in return on equity, resulting from paying a special dividend of 93 cents per ordinary share however countered this.
Earning per share increased 19% to 114,7 cents (2006: 96,7 cents), while return of average shareholders’ equity increased to 24 percent from 21 percent.
“These results should be viewed against a backdrop of tough market conditions. They are attributable to higher interest rates, good investment returns, a diversified range of products and services and the realisation of synergies in the group.”
Banking activities contributed 79 percent (2006: 78 percent) to the Group’s profit, while the life business has increased its share to 12 percent (2006: 10 percent).
Cornelissen said the Group’s cost-to-income ratio continued to improve to 47,5 percent (2006: 49.3 percent).
The improvement mainly resulted from a 26 percent increase in interest income, notwithstanding a 15 percent increase in operating expenses.
The banking group’s total assets grew by N$1,2 billion year-on-year to N$10,5 billion.
Advances growth slowed to 12 percent, mainly resulting from a competitive market and increasing interest rates.
The bank however also adopted a strategy not to grow the book at the expense of asset quality.
The banking group says it generated growth largely from the consumer segment, with FNB remaining a market leader in mortgage and asset-based financing.
“Although the impairment charges in the income statement has increased, the quality of assets remains healthy, with the ratio of non-performing advances to total advances improving to 2,7 percent (2006: 3,1 percent).”