More than 97% of applications for credit relief, amounting to capital relief of about N$1.4 billion, received by Standard Bank of Namibia Holdings Limited (SBN) were approved for those clients impacted by Covid-19. Namibia’s central bank instructed financial institutions to facilitate the granting of credit relief to clients impacted by the pandemic. In terms of these guidelines, banking institutions may give capital payment moratoria for a period ranging from six months up to a period of, but not exceeding 24 months.
“In response to this, the group invited its clients in the tourism industry, small and medium enterprises (SME) with revenue below N$10 million, students and any other clients impacted by Covid-19 to apply for capital and/ or interest payment moratoria. More than 97% of all applications received have been approved, amounting to outstanding capital relief of N$1.4 billion,” stated the SBN report.
It further indicated that their profit after tax did not escape the impact of Covid-19, reducing it by 19.6% compared to the previous year. The group however noted that its capital position remained strong, with a total capital adequacy ratio of 15.6%. This enabled a final dividend for 2019 of 27.37 cents per share which was paid on 08 May 2020.
The Group said the decision of the central bank on a cumulative 2.75% reduction in the repo rate since June 2019 had a significant impact on net interest income (NII), resulting in a decrease of 4.3% compared with the prior year.
SBN in its reviewed condensed consolidated interim results for the six months ended 30 June 2020 said non-interest revenue (NIR) also decreased by 3.6% due to a decline in transactional volumes during April, May, and June 2020 on account of lockdown restrictions.
Furthermore, SBN stated that gross loans and advances to customers declined by 3.3% from 30 June 2019 to 30 June 2020 (year-on-year) on the back of muted growth due to higher levels of liquidity since March 2020, among other reasons, due to the accelerated value-added tax (VAT) refunds and outstanding invoices processed by Government in April 2020.
According to the Group vehicle and asset finance declined by 10.7% on the back of a decline of 26.3% in new vehicle sales as of June 2020. Corporate loans recorded the highest growth at 8.7% while mortgage loans grew by 5.8%.
It was further detailed that deposits from customers increased year-on-year by 0.7% to N$26.4 billion of which current accounts grew by 16.9%, call deposits by 11.7%, and term deposits by 31%. Negotiable certificates of deposit (NCDs) were reduced by 28.5%.
Total income declined by 4.0% to N$1.2 billion. NII declined by 4.3% to N$630 million, while NIR declined by 3.6% to N$587 million.