The Namibian (Windhoek)

Namibia: FNB Namibia Reports Solid Half-Year Results

FNB Namibia Holdings has made a profit of N$320 million from its continuing operations for the six months ended December 31 2012, 14% more than the same period in 2011, the group's latest unaudited financial results have shown.

Profit of First National Bank of Namibia grew by 12% to N$292 million for the period under review.

Other financial highlights include an 18% growth in advances, only 9% increase in costs, 14% increase in earnings per share and 12% increase in headline earnings per share.

"The above reflects operational efficiency, with a respectable 48% cost-to-income ratio and an increase in return on equity to 31%, which allowed the group to declare an interim dividend of 46 cents in January 2013 against 41 cents last year," FNB Holdings said in a statement yesterday.

Earnings per share from continuing operations increased to 121,3 cents, up from 106,7 cents in 2011. Headline earnings per share increased to 121,3 cents compared to the 108,3 cents the year before.

The bank's fee and commission income grew by 18% to N$350 million due to good growth in accounts and transaction volumes. Non-interest income increased by 20% to N$403 million.

The bank's ratio of non-performing loans to average gross advances reduced to 0,9% compared to 1,3% in 2011.

Non-performing loans dropped by 19% to N$136 million.

First National Bank of Namibia remained well capitalised with a total capital adequacy of 16,09%, well above the statutory requirement of 10%.

FNB Holdings said the greatest identified uncertainty is how and when the global environment will exit the lacklustre growth stage, and therefore the downside risks to global and local growth remain. "Namibia, like most regional economies, will continue to experience positive growth in 2013.

The construction of the Husab mining project and the Otjikoto gold mine are among the key projects due to commence in 2013.

These projects hold positive knock-on effects for growth. For example, the N$21-billion Husab project will employ between 4 000 and 6 000 people during construction, which augers well for domestic spending," the group said.

Credit demand, which is a good proxy for consumer and business confidence, started accelerating during the second half of 2012 by 16% on average on an annualised basis. "This has been the strongest second half performance in the credit environment since 2006," FNB Holdings said.

"We view this as a precursor to a revival in private sector led investment over the medium term, especially in commercial property. Husab and Otjikoto gold should have a positive knock-on effect for household spending."

The group said it is well positioned to deliver sustainable returns to all stakeholders given these prospects, combined with several other factors such as FNB's strategy of building enduring and rewarding customer and stakeholder relationships, further capitalising on efficiencies throughout the operations, and managing increased risks confronting the financial services industry.

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