Bank Windhoek recorded N$360 million profit in its latest financial trading period spurred by revenue growth and cautious credit management policies.
This comes at a time when Namibia’s banking sector is witnessing gradual growth in numbers of depositors as more people take up banking products and services.
Bank Windhoek reported the profit in its financial year ended 31 December 2014 representing an increase of 12, 8% year on year.
Bank Windhoek Managing Director Christo de Vries said that liquidity management will continue to be a key focus area by further diversifying and improving the maturity profile of the group’s funding portfolio.
“The bank has maintained low bad debt levels with the non-performing loans as a percentage of gross advances decreasing from 0, 76% to 0, 66% over the comparative period,” said de Vries.
As at June 2014, the bank’s non-performing asset ratio stood at 0,68% while the credit to deposit ratio stood at 98,8%.
The bank’s total loans and advances increased from N$9,7 million in 2009 to 20 million in 2014 representing growth of 108% over 5 years.
This represents growth in financing to clients.
Bank Windhoek’s Chief Financial Officer, Philip Oberholzer said that a stable economic outlook for the year is foreseen with growth expected to be in line with credit and inflationary targets, which is expected to be achieved through the continued application of sound credit and risk management processes.
“Mortgage loans have been the biggest contributor to the loan book, growing by 146% from 2009 to 2014. This was followed by term loans that have grown by 91% from 2009 to 2014,” he said adding that instalment finance and overdrafts have grown by 79% and 63% respectively.
Loans and advances or net of provisions amounted to N$20,245,395 million while total shareholder equity grew from N$1 million in 2009 to N$2, 6 million in 2014 representing a substantial growth of 146%.
For the six months ended 31 December 2014, non-interest income increased by 16, 4% to N$395 million.
Non-interest income is mainly derived from service and penalty charges and in some instances, from asset sales and property leasing.
As compared to regular interest income, this income is largely unaffected by economic and financial market changes.
Bank Windhoek’s increase in interest income was driven by the increase in business volumes, with the leading contributors being transactional accounts and electronic banking channels.
Oberholzer said the bank understands that the trend in banking is towards electronic banking services and was therefore the first bank in Namibia to introduce cellphone banking services to its clients.
“Subsequently, internet banking services was introduced and the Bank continues to invest substantially in the upgrading and enhancement of its electronic products and service delivery. However, traditional banking services remain popular in Namibia and it is an important part of the banking experience for the client,” he said.
Distributable reserves increased from N$865,988 million in 2009 to N$2,020,779 million in 2014 representing growth of 133%.
Trade and accommodation snapped up 48% of the bank’s loan book last year effectively taking up N$9,7 million closely followed by individual loans at 14,2% taking up 2,8 million.
Real estate and business services took up 14, 1% of the loan book while building and construction took up 8, 5% effectively standing at N$1, 7 million.