CHAMWE KAIRA
The FirstRand Namibia group, which includes FNB Namibia recorded a net profit after tax of N$ 1,704 billion million in the financial year ended 30 June 2024, compared to N$ 1, 561 billion million), in the previous period, a 9.1% improvement on the previous year.
Financial results showed that the groups return on equity (ROE) also improved to 27.8% (2023: 25.5%). Headline earnings increased by 10.1% to N$ 1, 716 billion.
FirstRand said the main drivers of the increase in earnings are largely due to an improved trading environment, increased credit extended and base growth. This coupled with the interest rate hiking cycle through the period, has resulted in the improved earnings growth, the group said.
Considering a higher repo rate for the reporting period, net interest income grew by 14.3% to N$3, 082 billion, the company said.
FirstRand said the key drivers of its net interest income (NII) were good average advances growth, strategic and agile pricing, and the higher rate environment. Interest expense increased by 30.9% and interest income increased by 21.9%.
Interest income performance was mostly driven by the increase of average advances of 7.2% and strategic pricing aligned with our risk appetite.
“The impairment charge for the year increased with 99.3% to N$426 million driven by client strain experienced because of higher interest rates, sticky inflation and as a result we saw increased defaults in commercial business banking and SME sectors and in personal loans and home loan products for retail customers,” FirstRand said.
The group anticipates that the higher interest rate environment will continue into the new financial year, thus customers will continue to be under strain until such time that the rates reduce, and inflation is not as sticky.
“Various initiatives are being deployed by the group to ensure the impairment charge is contained within our set credit appetite,” the group said.
The group has remained well capitalised throughout the period, with industry leading levels well above the minimum regulatory requirements. Capital adequacy ratio was 17.6% (2023: 17.9%) and Tier 1 capital 16.7% (2023: 17.0%).
In terms of dividend declaration, FirstRand said a final ordinary dividend for the year ended 30 June of 180.16 cents per share was declared on 22 August. The last day to trade shares on a cum dividend basis will be on 4 October and the first day to trade ex-dividend will be 7 October. The record date will be 11 October and the payment date 25 October.
