CHAMWE KAIRA
Namibia’s major listed banks recorded divergent financial performances in the first half of 2026, with lower bad-debt provisions supporting profit growth at FirstRand Namibia while SBN Holdings benefited from strong loan growth, according to Simonis Storm Research.
In a banking sector analysis, Simonis Storm compared the performances of FirstRand Namibia, SBN Holdings and Capricorn Group over the January-to-June period, finding that operating profitability remained under pressure at two of the three groups.
SBN Holdings was the only bank to increase its pre-provision profit, which measures earnings before accounting for potential credit losses, while FirstRand Namibia and Capricorn Group recorded declines.
FirstRand Namibia’s profit after tax increased by 9.3% to N$1.078 billion, despite a 1.4% decline in pre-provision profit. Simonis Storm attributed the improvement largely to lower impairment provisions, which accounted for 80% of the bank’s operating improvement following a clean-up of its loan book and N$683 million in bad-debt write-offs.
SBN Holdings increased its pre-provision profit by 5.1%, supported by 17.4% growth in customer loans. The growth was partly driven by a N$2 billion Ministry of Finance facility.
The bank also reduced its loan-to-deposit ratio to 87.3%, indicating that its loan growth was accompanied by a lower proportion of deposits committed to lending.
Capricorn Group’s pre-provision profit declined by 0.8%, with its Botswana operations facing liquidity constraints, higher funding costs and restrictions on lending rates.
Bank Gaborone’s performance in Botswana as a major pressure point for Capricorn Group.
Bank Gaborone recorded a N$328 million negative swing in operating performance as funding costs increased following a liquidity squeeze, while loan yields failed to keep pace.
Non-performing loans in Botswana rose by 56% to N$1.283 billion, accounting for 44% of Capricorn Group’s total non-performing loans despite Botswana representing only 16% of the group’s loan portfolio.
Bank Windhoek’s share of the Namibian loan market declined from 35.0% to 31.5%, while FirstRand Namibia held 34.5%, making it the country’s largest lender by loan market share.
The South African Reserve Bank increased its repo rate by 25 basis points to 7.25% in September, while the Bank of Namibia is expected to raise its repo rate from 6.75% to 7% at its Monetary Policy Committee meeting scheduled for 28 October.
According to the report, a 25-basis-point interest rate increase could add approximately 2% to pre-tax profit at each of the three banking groups.
Simonis Storm revised its investment recommendations for the three banking groups, naming SBN Holdings as its preferred sector pick.
SBN Holdings received a buy recommendation with a target price of 1 620 cents, supported by its operating momentum and capital utilisation.
FirstRand Namibia was downgraded from buy to hold, with a target price of 6 200 cents, following a 15% dividend-adjusted market rerating. Capricorn Group was downgraded to sell with a target price of 2 680 cents.
