By Mbatjiua Ngavirue WINDHOEK First National Bank Holdings has announced a 21% growth in headline earnings to 95 cents per share, up from 78.7 cents per share. Earnings attributable to ordinary shareholders increased by 21% from N$210.9 million in 2005 to N$255.6 million in the 2006 financial year. The bank said this was achieved despite the fact that 6.8 million new ordinary shares were issued on the last day of the previous financial year as part of concluding the Swabou merger. At the same time, operating income before tax for the year grew by a significant 20%, from N$309.5 million to N$372 million. Banking operations continue to be the main contributor to headline earnings at 86%, although its share has fallen slightly from 88% in 2005. The life assurance business has made inroads, thus increasing its contribution to Group earnings from 11% in 2005 to 15% in 2006. Swabou Life’s earnings after tax increased by 71% to N$ 34.9 million on the back of a 52% increase in new business and 26% growth in gross premium income. CEO of FNB Holdings, Vekuii Rukoro, and Chief Financial Officer, Gideon Cornelissen, presented the annual results of the company in Windhoek last Thursday. Rukoro said the main driver of the Group’s impressive results was asset growth on advances. Thanks to favourable interest rates, FNB achieved above-inflation growth in the home loan market. The bank says it remains the clear market leader in the home loan market with over 50% market share. The short-term insurance division was the only part of FNB Holdings’ business which showed a negative performance. The poor performance of the short-term insurance business was the result of losses suffered due to the Mariental floods, and losses on vehicle underwriting. Reviewing the past year, he said it was marked by high business confidence, low interest rates and low inflation, although there was an upward trend in inflation towards the end of the year. There was, however, fierce competition in mature market segments, which placed a severe squeeze on margins. The year nevertheless saw above-average returns on investments due to good performance by the equity markets. Rukoro was keen to emphasize that First National Bank is fully a Namibian company which operates independently of FNB in South Africa. FNB Holdings is the largest non-dual listed entity on the Namibian Stock Exchange (NSE) with a market capitalization of 1.9 billion. The bank is 60% owned by FirstRand Limited of South Africa, but the remaining 40% is Namibian owned. The bank says that of this 40% shareholding, 23.34% is held by the general public, while 16.65% is in the hands of the Government Institutions Pension Fund (GIPF). Four percent of the company’s shares were reserved for Black Economic Empowerment and were allocated to two separate BEE consortiums, which now each have a seat on the board. He said that when these shares are fully transferred, the Namibian ownership in the bank would rise to roughly 45%. Rukoro stressed that FNB Namibia has independent credit approval powers, meaning that nearly all loan applications are approved locally and no longer have to be referred to South Africa for approval. The bank also has discretionary powers for approving the highest loan amounts of any bank in Namibia, he claimed. Furthermore, FNB says its entire credit card operation has been `Namibianized`. All aspects, from issuing of cards to customer support, have been moved from FNB South Africa to FNB Namibia.