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Home / FNB Namibia Group reports headline earnings of N$520m
FNB Namibia Group reports headline earnings of N$520m
2018-02-16Staff Report 2 Staff Reporter Windhoek-With mid-year headline earnings of N$520 million in the current economic landscape, FNB Namibia Holdings continues to play a major role in the financial services sector delivering above industry Business and Consumer support in lending, and an encouraging growth in its deposit-taking franchises, despite ongoing funding pressure in the market and rising impairments. Local economic growth in the second half of 2017 followed a trend similar to the first half, with economic sectors contracting, rising unemployment, year-on-year reduction in the growth of private sector credit extended (PSCE), rising debt levels and negative investor confidence. Across the FNB portfolio, the six months to December 2017 were characterised by a reduction in top-line growth, combined with a strong investment cycle. The group’s operating franchises (FNB Namibia, RMB, WesBank, Outsurance and Ashburton), however, continued to produce resilient operating performances despite the macroeconomic slowdown. Advances grew at 5.8 percent (compared to industry PSCE growth reported for December of 5.1 percent) and the deposit raising franchises achieved a growth of 12 percent. Profit before tax decreased by 11.9 percent to N$780 million (2016: N$885.7 million). Profit before tax was mainly impacted by the increase in impairments, an increase in the cost of funding and the integration of Pointbreak and EBank, which were acquired in the last quarter of the previous financial year. Normalised for Pointbreak and Ebank, profit before tax decreased by 9 percent to N$805.7 million. Earnings per share decreased to 198 cents (2016: 226.3 cents), while return on average equity reduced from 25.6 percent (June 2017) to 23.3 percent for December 2017. Return on average assets was slightly down to 2.8 percent (June 2017: 3.0 percent) with an accompanying cost to income ratio increase of 52.1 percent (June 2017: 48.9 percent). Overall fee and commission income benefited from strong volume growth of 8 percent with ongoing momentum across electronic channels, again demonstrating the success of the innovative financial group’s digital Bricks to Clicks migration strategy. The group’s long-term digital strategy has had some short-term negative impact from a reduction in cash-related NIR, as well as from the cost of the newly introduced e-migration FNB Customer Cashback Rewards programme. However, the strategy to optimise customer experience is both mutually beneficial, and core, to the group’s sustainability and customer commitment. A resulting decline in branch volumes has also set it up to reduce legacy infrastructure costs going forward. Six month’s into its financial year, with active accounts up 6.3 percent, and transactional volumes growth of 8 percent, new-to-bank and existing customers across all franchises have responded positively to the Group’s end-to-end financial services offering. “We are passionate about delivering sustainably to all our stakeholders, from shareholders to customers, to our countrywide communities and employees. To be the financial partner you can rely on at any time, requires reliable real-time customer support coupled with forward-thinking investment; a balance we remain committed to getting right every day, especially in these tight economic times” Sarel van Zyl, CEO, FNB Namibia Holdings 2018-02-16Staff Report 2
