Standard Bank Namibia (SBN) has not shaken off the adverse impact of Covid-19 in its full-year results after the bank recorded a decline in profit after tax of 11.9% for 2021, from N$421 million of 2020 to 371 million in 2021. This is according to the bank’s annual report for 2021,  released last week. 

“Despite the decline in profit after tax, we delivered strong balance sheet growth. Our gross loans and advances to customers’ growth of 1.9% outpaced private sector extension growth of 1% in 2021. Deposits from customers grew by 10.6%, while interest expense reduced by 26.7%. Non-interest revenue is up 1.4% year-on-year, with net fees and commission income increasing by 6%, showing positive signs of increased economic activity,” stated Mercia Geises, chief executive director at the bank.

She noted that the 13.7% increase in impairments year-on-year is driven firstly by the decline in the valuation of residential and commercial properties. Secondly, the prevailing circumstances delayed the effectiveness of the bank’s non-performing loan (NPL) recovery strategy, but she said they have taken clear actions towards the end of 2021 to ensure a reduction in the NPL and credit loss ratio (CLR) in 2022. 

Geises said initiatives are being reviewed and adjusted to address the increase, and they firmly believe the renewed management agreed actions will deliver the necessary results to limit increases. 

“We remain focused on building an efficient business, and we have accordingly contained our cost growth to 5.9%. 

Despite the subdued profit performance, we have made significant strategic progress in 2021, including the successful raise of N$1.5 billion of funding on both the JSE and NSX debt capital market and onboarding of strategic partners to support the transformation of our business,” she added.

As for the 2022 outlook, Geises said it was underpinned by the optimistic outlook for growth, but the bank has replaced it with a more cautious outlook, given the latest geopolitical developments and the potential impact it might have on the Namibian economy. Standard Bank thus remains cautiously optimistic about the increased economic activity in green shoot sectors, in particular mining, tourism and the wholesale and retail trade. 

“Our strategy for the next four years has been crafted to ensure we will return to revenue growth of between 5% to 9%. Reducing our cost-to-income ratio to below 60%. Achieve a credit loss ratio of 70bps to 100 bps through-the-cycle, and a return of equity of between 15% and 18% by 2025,” she noted.

Furthermore, chief financial officer at the bank Letitea du Plessis said even if the bank still reels from the pandemic’s impact, they are positive about the change they have started to see towards the end of 2021. Growth in loans and advances, as well as the increase in deposits from customers, gives the bank a good base to build on in 2022.-mndjavera@nepc.com.na

Photo: SBN