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SBN revenue increases by 18.3%

Mon, 31 August 2015 22:16
by Donald Matthys

Standard Bank Namibia’s (SBN) total income grew by 18.3%, with net interest income (NII) increasing by 28.9% primarily due to 18.9% increase in loans and advances to customers, driven mainly by growth in high quality Corporate & Investment Banking (CIB) assets.

SBN also recorded residential mortgages growth of 7.9% with an increase in value of new business partly offset by a higher pre-payment rate, while 13.9% growth was achieved in vehicle and asset finance. Gross loans and advances to customers grew by 18.9%.

“A contraction of 13% in card debtors was supplemented by growth of 7.3% in overdrafts and other demand loans, substantial growth of 59.9% was achieved in term lending to high quality corporate and business customers,” Junius Mungunda, Chief Executive Officer of the SBN said.

Standard bank’s margin improvement of 60 basis points resulted mainly from improved liquidity management and enhanced risk-adjusted pricing levels with customers.

Mungunda stressed that the growth in the remainder of this year and over the next two years is expected to be driven mainly by the construction, infrastructure sectors and public works programmes.

Their funding costs and the requirement to hold higher levels of high quality liquid assets were largely balanced by interest rates having increased by 75 basis points over the past 12 months.

“Non-interest revenue grew 7.1% supported by good growth in fees and commissions and other income, fees and commissions were 9.9% higher than in the prior period as a result of CIB assets offset by lower fees in the retail space due to the removal of cash deposit fees for individuals,” he said.

Standard bank increased performance for the six months ended 30 June 2015, increasing profit after tax by 39% and loans and advances by 19%. The group return on equity has also increased to 22.7% from 17.2% in 2014.

Total income grew by 18% and expenses grew by 12% reflecting the investment made in systems and infrastructure over the past three years while credit impairment charges were 13% lower than June 2014, indicative of the progress made in the management of our loan book.

“The bank maintained a well-capitalised position based on tier I, total capital adequacy and leverage ratios throughout the 6 months under review, furthermore, we have complied with base compliant internal liquidity standards throughout the period including a net stable funding ratio and a Liquidity coverage ratio calculated on a daily basis,” Mungunda mentioned.

Saying that growth of 3.3% is expected in 2015, marginally lower than in 2014, with a gradual improvement in advanced economies and a slowdown in emerging market and developing economies, Mungunda said that this year the domestic economy is expected to grow by 5% from the initial estimate of 5.4%.

The growth in the remainder of 2015 and over the next two years is expected to be driven mainly by the construction, infrastructure sectors and public works programmes.

They have seen continuing stability in IT environment, strengthening their balance sheet and continued to strive for operational efficiency through increased digitisation and integration of the universal banking model.

“We will continue to leverage our brand, market positioning and talented staff to better service our clients and customers within Namibia,” Mungunda said.