Staff Writer
Simonis Storm has maintained a “hold” recommendation on Letshego Holdings Namibia Limited after reviewing the company’s financial results for the year ended 2025.
The research firm said the results show strong growth in net interest income but noted that operating momentum remains moderate.
Interest revenue calculated using the effective interest method increased to N$1.107 billion from N$954.2 million in the previous year.
Interest expenses declined to N$382.9 million from N$404.9 million.
Net interest income rose to N$723.9 million compared to N$549.3 million previously.
According to the research note, the increase reflects improved margin capture and a stronger liability structure rather than rapid expansion of lending.
Net advances increased slightly to N$5.438 billion from N$5.386 billion.
Simonis Storm said the figure indicates that earnings growth was driven mainly by improved spreads.
The report also pointed to changes in the company’s funding structure.
Customer deposits increased to N$1.621 billion from N$1.302 billion.
Borrowings declined to N$2.620 billion from N$2.899 billion.
Despite the growth in net interest income, profit before tax declined to N$464.8 million from N$577.9 million.
Profit for the year increased to N$505.8 million from N$418.8 million.
The increase was largely due to a lower tax burden.
The effective tax rate fell to 9.89% from 12.48%.
Simonis Storm said the lower tax rate was driven mainly by income streams not subject to tax, including portions of insurance results and money market placement income.
The research firm said Letshego remains a profitable and well-capitalised financial services company with solid capital strength and improved funding dynamics.
However, analysts noted that moderate loan growth, higher operating costs, and pressure on household finances may limit share price gains.
“For lenders such as Letshego, a high dividend yield can reflect market caution around growth quality, earnings concentration and economic cycle exposure,” the report states.
Simonis Storm said a stronger investment view would depend on broader revenue diversification, stronger loan growth without higher impairments and improved operating leverage where revenue growth exceeds cost growth.
The report also highlighted risks including pressure on household finances that could increase impairments, funding costs that may reduce margins and execution risks linked to the company’s strategy to expand into commercial banking services.
