Banks profitable, liquid, well capitalised

Developments in the Namibian banking sector has pointed out that the sector remained profitable, liquid and adequately capitalised in 2023, despite a strained economic environment.

Board chairperson of the Namibia Deposit Guarantee Authority, Ebson Uanguta said this week that the banking sector continues to record higher profitability levels, coupled with robust capital levels above prudential limits.

Uanguta revealed that the sector’s common equity Tier 1 capital increased last year and stood significantly above the required 7% limit.

The non-performing loan (NPL) ratio picked up slightly year-on-year and is nearing the trigger ratio of 6%, due to the high inflation and interest rate environment that prevailed during the period under review.

He said last year marked the first year of implementation of the Authority’s three-year Strategic Plan (2023–2025). This sustained effort and commitment saw the institution yielding tangible results during the first year of its Strategic Plan implementation, Uanguta said.

The huge profitability of local banks is without controversy. Last month, chairperson of the parliamentary standing committee on economics and public administration, Natangwe Ithete accused the banking industry of being a ‘mafia business.’ This was during a meeting with representatives from the Bankers Association of Namibia (BAN), Bank Windhoek, FNB Namibia, Nedbank Namibia, and Letshego Namibia.

Bank Windhoek’s holding company, Capricorn Group achieved solid results with profit after tax for the six months ended 31 December 2023, increasing by 18.5% to N$827.6 million, compared to a profit after tax of N$698.2m that was reported in the comparative period in the prior year.

FirstRand Namibia said in its consolidated interim financial results for the six months ended 31 December 2023, its headline earnings decreased slightly to N$836 million (2022: N$842 million). The FirstRand Namibia group’s return on equity maintained a healthy 27.8% (2022: 27.8%).

In March, Nedbank Namibia reported a profit after tax of N$460 million for the year ended 31 December 2023. This was an increase of 54% compared to its 2022 financial year.

Letshego Holdings Namibia’s profit after tax amounted to N$353.3 million (2022: N$350.4 million), an increase of 1% (2022: 16%. The bank remains well capitalized with a capital adequacy ratio of 35% (2022: 34%).

The revenue surge was propelled by growth in interest income, which rose by 18%, and robust expansion in insurance income to N$ 275 million (2022: N$ 248 million).

Standard Bank Namibia’s results for the year ended 31 December 2023, saw profit for the year increased by 23.3%, up from N$624 million to N$770million.

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