CHAMWE KAIRA
Firstrand Namibia Limited has said group’s earnings and headline earnings for the year ended 30 June 2024 will be significantly higher than prior year by between 7% to 12%.
“The main drivers of the increase in headline earnings are customer growth, credit extended during the period and higher transaction volumes. The group’s audited financial results will be released on or about 12 September,” the company said.
In the 2023 annual report, the FirstRand Namibia group said it has made substantial strides towards delivering on its strategic targets and growing the business. The results showed a net profit after tax of N$1 56 billion (2022: N$1 27 billion), a 23% improvement on the previous year.
In 2023, a number of key factors have contributed to the group’s strong position, including credit extension exceeding pre-Covid levels, stable credit impairments, and the effective containment of operating costs.
Headline earnings in 2023, increased by 23% to N$1 55 billion. The main drivers of the increase in earnings are largely due to an improved trading environment, increased credit extended and base growth.
Last year, Firstrand Namibia Limited said it remained well capitalised, with its Tier 1 ratio standing at 17 % from 20.2%, given strong capital creation and lower risk weighted assets. This is still within its target of 14% and exceeds regulatory requirements.
The group’s total assets increased by 11% to N$58 billion (2022: N$52 billion). Net advances, making up 61% (2022: 61%) of the balance sheet, reflected a year-on-year increase of 11% to N$35 billion.
Firstrand Namibia Limited asset profile is dominated by a diversified advances portfolio. The composition of the gross advances’ portfolio consists of FNB retail secured (51%), FNB retail unsecured (9%), FNB commercial (22%), and RMB corporate (18%). Mortgage loans increased year-on-year in 2023 by 5% to N$16 billion and constitute 45% (2022: 47%) of gross advances.
Through providing credit to individuals, FNB Namibia continued to enable home ownership across the social spectrum. The group’s exposure to home loans is reflective of the Namibian banking industry where home loans tend to average 40% of credit extended in the local market.
In the face of increasing competition, WesBank focused on protecting its origination franchise and return profile through disciplined risk appetite. This resulted in vehicle and assets financing increasing by 15% to N$3.6 billion, the main driver being commercial Vehicle and Asset Finance (VAF), which saw clients replacing fleets due to improvement in tourism and other sectors.
