By: Kelvin Chiringa
Trouble has reared its head in the local banking sector paradise as a latest report has disclosed that Bank BIC is the only banking institution that has failed to make a profit in the past five years.
The bank is making N$147 000 losses every day it is operating.
This comes as the Angolan-connected bank survived the firing line when the freezing of the assets of controversial Angolan business mogul Isabella Dos Santos failed to affect its operations in Namibia.
But the bank’s woes are far from over, as the latest financial report shows that it has been massively bailed out by its shareholders while running cumulative losses since 2015.
With a mere five branches in Namibia so far, Bank BIC is operating at the back of a N$218 million loss, which has piled up through the years.
Available statistics show a bloody trail which started with a N$6 million loss in 2015 before it ballooned to N$23 million in the 2017 financial year—further spiralling to a staggering N$26 million by the following year.
By 2019, Bank BIC’s losses had peaked at a massive N$45 million, and currently, it is limping with a N$53.9 million loss for the 2021 financial year.
Bank BIC is the odd one out in a sector where Standard Bank Namibia Holdings made a profit of N$371 million for the 2021 financial year, with FNB pre-provision profits growing 6.6 per cent to N$957 million by the 31st of December 2021.
Overall, the banking sector remained profitable.
The fall at SME bank and the falling dominoes in the Dos Santos empire saw Bank BIC turning out to be a candle flickering in the wind, and concerns are how long will shareholders continue pumping in money before the cards come tumbling down.
A report of two years ago indicated that a court in Angola had issued an order to freeze the bank accounts of Dos Santos on the 31st of December 2019, and by then, she had 42,5 per cent shareholding in Bank BIC.
Then Bank of Namibia governor, Iipumbu Shiimi, said to journalists, “It should be kept in mind that Bank BIC Namibia Limited is owned by multiple shareholders and the Bank of Namibia is not aware of any development that could threaten the stability of BIC Namibia at the moment.”
“The Bank of Namibia is aware of developments in Angola pertaining to an indirect shareholder in a locally licensed bank, Bank BIC Namibia Limited. The Angolan authority has not reached out to the Bank of Namibia in relation to Bank BIC Namibia Limited.”
Now with rolling year-after-year losses, business reporter and analyst Lazarus Amukeshe said it is a matter of time before the regulator knocks on its door.
The Bank of Namibia is the headmaster of the local banking sector and ensures stability in the system by weeding out bad apples.
“It’s definitely going to raise the eyes of the regulator in terms of you would want a bank ideally, if it’s keeping people’s deposits, to be able to retain a certain level of income not only to pay interest for people that have saved their money but also just to allow for sustainability in the future,” he said.
