FirstRand Namibia interim results show profit before tax up 4.1% to N$812m
WINDHOEK - FirstRand Namibia’s interim results for the period ended 31 December 2018 demonstrates continued strong performance in the face of a difficult economic climate that has seen the local economy contract for the last two consecutive years. Profit before tax increased by 4.1 percent to N$812.3 million (2017: N$780 million) for the period under review while the group’s revenue performance demonstrates that the investment in digitisation and customer-centric service is bearing fruit.
The First Rand Group was established in 1998 following a merger between First National Bank of South Africa, Rand Merchant Bank and Momentum Insurance & Asset Management. Today, the FirstRand Group is listed on the Johannesburg and Namibian stock exchanges which makes FirstRand Limited the largest listed financial services group by market capitalisation in Africa.
The latest results for FirstRand Namibia show earnings per share increased to 208.9 cents (2017: 198.1 cents). Return on average equity reduced to 22.4 percent (2017: 23.3 percent), while return on average assets was 2.7 percent (2017: 2.8 percent).
“The impact of the challenging economic climate was certainly felt in the financial services sector. The Namibian economy had to endure the main elements that detract from economic growth, namely high unemployment, harsh environmental conditions, increasing inflation, low commodity prices and lower investor confidence,” said Oscar Capelao, FirstRand Namibia Chief Financial Officer.
Net interest income grew by 10.5 percent to N$1 001.1 million (2017: N$ 906.2 million) on the back of steady deposits and advances growth. The pressure on margins remained constant when compared to the same period a year ago, demonstrating the greater need for conscious effort to take risk into consideration when pricing the group’s portfolios.
The group Net Interest Revenue (NIR) increased by 6.4 percent primarily supported by a fee and commission income increase of 7.2 percent, demonstrating a positive performance in this challenging economic environment as the group benefited from healthy transaction volumes.
The group operating costs have increased by 6.9 percent to N$1, 020.1 million (2017: N$954.0 million). This is reflected in cost to income ratio of 51.7 percent (2017: 52.1 percent). According to Capelao this level of cost growth is in line with inflation and demonstrates the measures taken by the group to manage discretionary spending, while managing structural cost programmes to realise efficiency gains that can be invested in growth initiatives.
The most recent figures also show that the group’s total assets increased by 8 percent to N$42.1 billion (2017: N$ 39.0 billion). Net advances making up 69 percent of the balance sheet, reflected a year on year increase of 2 percent to N$ 29.1 billion.
Deposit growth was ahead of advances, growing by 7 percent to N$34.7 billion. The retail portfolio was a significant contributor to the deposits growth as a 13.3 percent increase was experienced aided by the increased demand for savings and investment products as individuals tighten their purse strings.
“The group’s growth in profitability shows an all-round strong team performance and an increased customer service and digitisation experience. Deposit growth and strong customer, stakeholders, community and employee service delivery contributed to good interim results despite a tough economic climate. A balance we remain committed to getting right every day,” concluded Capelao.
2019-02-18 10:21:57 1 months ago