Standard Bank Namibia has shaken off the adverse impact of Covid-19 in its half-year results after the bank recorded an increase in profit after tax of 24.1% for period on period to N$235.3 million. This is according to the bank’s interim results announcement for the first six months ended 30 June 2022, released this week.
“Modest balance sheet growth, stronger signals of a recovering economy and the positive endowment effect ensuing from repo rate increases, has driven substantial performance growth in 2022,” stated Mercia Geises, chief executive director at the bank.
To continue safeguarding the peg arrangement and thus anchoring inflation expectations, while meeting the country’s international financial obligations, the Bank of Namibia decided to increase the repo rate by 75 basis points to 5.50% from 17 August 2022 which seemed like it worked in favour of commercial banks.
Geises noted that net interest income showed good growth stemming from the hikes in the repo rate, strong loans and advances growth and favourable restructure of the composition of the deposits and current accounts. The net interest margin improved to 4.3% (31 December 2021: 3.8%).
Geises added that non-interest revenue was up 7.7%, continuing to grow above inflation levels to N$615 million. Good margins on trading revenue and growing use of digital channels, notably electronic banking and instant cash, were the main contributors. Excluding the reduction in other gains and losses on financial instruments in the first half of 2022 versus first half of 2021, the growth in non-interest revenue has been 10.7% over the reporting
period.
“Credit impairment charges increased by 7.2% to N$132 million and the credit loss ratio remained flat period-on-period. This remains a continued focus area,” said Geises.
Further, she added gross loans and advances to customers increased by 2.2% to N$23.4 billion period-on-period driven by growth in vehicle and asset finance loans of 6.5%, corporate lending growth of 6.4% and growth in other loans and advances of 9.6% with signs of recovery being seen in credit demand.
She continued that the decline in sovereign lending is attributed to good performance on structured transactions, resulting in reduced exposure. Loans and advances to banks increased by 133.9% following temporary placements with the central bank, primarily.
As for the 2022 outlook, Geises said the bank’s long-term outlook and priorities are underpinned by cautious optimism for recovery in economic activity and growth exceeding pre-Covid-19 levels in the medium-term.
“The group’s capital and liquidity position remained strong and within approved risk appetite and tolerance limits,” Geises stated. -mndjavera@nepc.com.na