New bank on the horizon …………. Ghanaian investor seeking banking licence

The Bank of Namibia has received one application from a local company partnering with other investors seeking authorisation to establish a banking institution, Deputy Governor, Leonie Dunn disclosed this week.

Dunn said the application is being assessed to determine whether the applicants meet the requirements for authorisation to conduct a banking business.

Observer Money established that the applicants include an investor from Ghana in West Africa.

The current authorised banking institutions are Bank Windhoek, First National Bank Namibia, Standard Bank Namibia, Nedbank Namibia, Bank BIC Namibia, Letshego Bank Namibia and Banco Atlántico.

The new Banking Institutions Act took effect on 8 August 2023, enhances the regulatory powers of the bank and introduces, among others, the regulatory framework for microfinance banking institutions, the requirements relating to recovery plans, the requirements relating to foreign ownership in banking institutions, and the regulations relating to fees and charges imposed by banking institutions on their customers.

Namibia’s banking sector remained profitable, liquid, and adequately capitalised in 2023. The industry experienced lower growth in its balance sheet during 2023 than it did during 2022. The balance sheet stood at N$174.4 billion, an increase of 6.1%, which was positive, but significantly lower than the 11% growth recorded in 2022.

Net loans and advances remained a key asset class for banks. Net loans and advances held the majority share at 61.9% (68.5% in 2022), followed by cash and balances with banks at 17.9% (16.1% in 2022) and short-term negotiable securities at 13.1% (12.5% in 2022).

Total loans and advances stood at N$112.6 billion, growing by 2.6% in contrast to the 1.4% recorded in 2022. The banking sector’s capital adequacy stood at 16.6% in 2023, declining from the 16.9% recorded in 2022. The total income amounted to N$12.8 billion, representing growth of 15%. Net interest income expanded by 17.4% to N$7.9 billion, driven by higher interest income earned on the back of rising interest rates in 2022 which continued into the first half of 2023.

The banking sector observed a decrease in the number of fraud and related economic crimes during 2023 in comparison to the previous reporting period. A total of 357 fraud cases were reported during 2023, a decrease of 3.5% against the 370 cases reported in 2022.

The categories of fraud experienced by banking institutions in 2023 included ATM (Automated Teller Machine) fraud, EFT (Electronic Fund Transfer) fraud, credit and debit card fraud, mobile application fraud, and theft of cash.

The total value of fraud incidents reported in 2023 decreased to N$27.2 million, down from N$41.6 million in 2022. The stock of liquid assets stood at N$26.4 billion in 2023, representing an increase of 4.7% from N$25.3 billion reported in the previous year.

In terms of illegal financial schemes, 2023, saw 18 cases involving suspected illegal financial schemes were reported and they are being assessed by the bank to determine whether they contravene the law.

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