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Home / Firstrand Namibia profit before tax down 3.8% to N$1.5 billion

Firstrand Namibia profit before tax down 3.8% to N$1.5 billion

2018-09-10  Staff Reporter

Firstrand Namibia profit before tax down 3.8% to N$1.5 billion

WINDHOEK - FirstRand Namibia, previously FNB Namibia Holdings, says it produced a sound set of results for the year ended 30 June 2018, particularly because financial services entities, and especially banks’ earnings, are inextricably linked to the health of an economy which is currently facing challenging conditions.

The group’s results and commentary were released on a normalised basis, as the group believes this most accurately reflects its economic performance. The full results include the acquired Pointbreak companies and EBank for a full twelve months whereas prior the year only had this in for three months because the acquisition was only concluded on 30 March 2017. The bank noted that this made line items in the profit and loss statement impacted by the acquisition, not comparable at face value. Normalised operations therefore exclude the Pointbreak and EBank earnings impact for the current and comparative year.

“Despite a very challenging economic period, the group produced a set of satisfactory results for the year under review. The group maintained a stable funding and liquidity base and sustained a solid capital position,” said Oscar Capelao, Chief Financial Officer of FirstRand Namibia. 

“Resilient, high quality earnings on the back of reasonable top line growth, translated into a strong return profile, well positioned for the continued emergence of the credit cycle.” 
These earnings deliver sound returns to the group’s local shareholders (nearly 40 percent), and nearly 80 percent of the group’s profit before tax distribution stays in Namibia via local shareholders’ returns, 35 percent re-investment into Namibia, and taxation.

“Headline earnings at N$1.039 billion were slightly lower than last year. Normalised earnings, or headline earnings adjustments, non-operational items and impact of the acquired subsidiaries which did not form part of the group for the full comparative period provide a more accurate view of performance,” read a FirtsRand statement. 
Normalised profit before tax for the year decreased by 3.8 percent to N$1.58 billion. Return on average equity was 22.1 percent (2017: 25.6 percent), and return on average assets was 2.7 percent (2017: 3.0 percent) while cost to income ratio increased slightly to 50.3 percent (2017: 48.4 percent).

“We are satisfied that the return to all of our investments of time, effort and expense has delivered appropriately to our stakeholders, and we are ready to continue upping our game year on year. Systems enhancements, treating customers fairly through strengthened governance structures, and managing legacy systems while investing in digital innovations, has certainly affected profit, but we believe the investments we have made to be sound, and good, for customers. We are committed to delivering to our ‘bank of the future’ goal while remaining today’s preferred bank too,” said Sarel van Zyl, CEO of FirstRand Namibia. 

“In these difficult times, helping and supporting our customers through the cycle is a priority. Providing solutions to assist them transactionally, ensuring the protection of their assets, helping them invest and manage what they have for growth, and insuring them against losses, is what our full-service end-to-end financial services group offers. How can we help you remain our call to action?”

“I would like to thank our employees for their contribution, hard work, and dedication to ensure that customers experience “a great Namibian financial services business, creating a better world”. I am confident that together we will continue to provide value for our customers, shareholders and stakeholders,” van Zyl concluded.

2018-09-10  Staff Reporter

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