BANK BIC Namibia, which is majority-owned by Isabel dos Santos, has finally released its 2018 financial statements, posting notables of a N$26,9 million loss - and an N$82,4 million cash injection from a sister bank in the lax regulated island of Cape Verde.
The sister bank - Banco BIC Cabo Verde - incorporated 600 kilometres off the coast of West Africa is also reportedly majority owned by Dos Santos.
It is this same bank that was reported to have been used to route millions of dollars in payments from Chinese and European contractors working on projects in Angola - where prosecutors accuse Dos Santos of embezzlement and money laundering.
The two-year delay in the release had left depositors in the dark about the performance of the bank - which according to financial statements had an asset base of N$374 million.
The financials which were released last Friday show that the asset base in 2018 was mainly funded by the N$284 million capital and N$111 million from related parties.
Since operations started in 2016, Bank BIC Namibia is, however, yet to realise profits - and had accumulated losses of N$81 million.
In the accounts, the bank also hinted that 2020 might not be a good year either, especially with Covid-19 wreaking havoc in many industries.
The bank said it expects at least 35% of loans to be impacted by Covid-19, leading to increased risk of defaults, and in consequence reduced income from interest.
According to the directors' report, the loss is because the bank is still in a start-up phase, and there are plans to gain market share over the coming years.
Despite the huge accumulated loss, the bank has, however, managed to grow the loan book - in 2018 at N$273,9 million, which started off at N$86 million in 2016, to N$154,4 million in 2017.
These loans were mostly given out to fund properties and businesses, and also lend a larger portion to the central bank.
A notable figure in the 2018 accounts though, is the bank's overdraft facility which had a balance of N$60 million, from N$2 million in the preceding year.
The bank earned interest income of N$20,9 million and a smaller non-interest income at N$1,6 million in 2018. This income was, however, swallowed up by expenses that stood at N$56,6 million - leading to another loss.
Interest from the 2018 loan book was at N$20,9 million and was mainly earned from the loans extended to clients and very little came from amounts held at the central bank and loaned to other banks.
The bank was heavily involved in related party deals - with another sister bank, Banco BIC SA depositing N$28 million or at least 41% of all deposits with the bank.
The rest of the deposits stood at N$38,4 million - largely coming from individuals (N$30 million) - and were held in savings accounts (N$17 million) and term deposits (N$13 million).
Bank BIC SA is also owed another N$6 million by Bank BIC Namibia. Other notable related party transactions include N$32,6 million owed to Bank BIC Namibia by Banco BIC Portugues SA.
When companies engage in massive related party transactions - in most cases it turns out that such transactions lack commercial substance and are entered to obtain a certain benefit that would most likely not be available to parties outside a certain group of companies.
According to the audit report by PwC Namibia, the financials were in order. The bank was a going concern in 2018, and still is. The total risk-based capital ratio was at 84% and cash and cash equivalents closed 2018 at N$57,7 million.
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