CHAMWE KAIRA
Standard Bank Namibia Holdings profit grew by 38 % in the six months ended 30 June to N$505.7 million, the company said in interim results.
The cost-to-income ratio decreased to 54.9% from 58.2% in June 2023 and return on equity improved from 15.6% in December 2023 to 18.6% in June this year.
Standard Bank said net interest income increased by 18.3% to N$1billion. This increase is attributable to the growth in loans and advances to customers of 5% and the realisation of funding optimisation strategies, which improved the net interest margin to 6%, the results showed.
Credit impairment charges decreased by 29.3% to N$92 million. The decrease is largely as a result of the regularisation of group scheme home loan accounts, which were previously impaired due to technical arrears. Excluding these exposures, impairment charges increased by 7% period-on-period.
The non-performing loans (NPLs) ratio increased to 6.06%, but still remaining within the industry average of 6.1% as at 31 March. The company declared an interim cash dividend for the six months ended 30 June of 68 cents per ordinary share.
Growth in transaction volumes and client activities resulted in a 13.3% increase in non-interest revenue to N$765.1 million. Trading revenue growth of 37.7% to N$122.4 million was driven by increased transaction volumes and volatility in the currency markets, the results showed.
Other gains and losses on financial instruments increased by 88.8% to N$75 million, mainly due to the higher returns on excess liquidity invested in unit trusts and money market funds, the bank said.
In terms of economic outlook, the bank said world economy is expected to continue recovering at a subdued pace.
“The International Monetary Fund’s July 2024 World Economic Outlook update estimates global economic growth of 3.2% for 2024 and 2025 growth is forecast to be at the same pace as in 2023. Namibia’s economic growth rate is expected to decrease to 3.5% in 2024 before improving to 3.9% in 2025. The projected slowdown in 2024 is largely due to the anticipated weaker global demand and slower growth in the primary industries, particularly the mining industry. GDP growth in 2025 will be underpinned by rebounding of activities within the agriculture and mining sectors,” the bank said.
Standard Bank expects customer spending to remain contained with disposable income still under pressure from high interest rates and elevated inflation.
“We will continue to support our clients through these challenging times, and transforming our client’s experience remains our priority. Looking ahead, we remain steadfast in fulfilling our purpose through our pursuit of innovation, excellence and customer satisfaction. We eagerly anticipate a future marked by shared success, sustainable growth and creation of enduring value.”
