FNB Namibia pays N$385m to Government
FNB Namibia holdings which recorded profits of N$765 million in the last financial year paid N$385m into government coffers and N$283m in dividends to share holders.
Commenting on the financial results FNB Group Chairperson Claus Hinrichsen said the financial giant expects a better future depending on the performance of the global economy.
"Given the strong domestic demand and the expectation that global growth will be much more anchored in the second half of 2014, Namibia should experience broad-based growth going forward,’’ he said adding that, “The final dividend for the year ending 30 June 2014 is 67cents per ordinary share. With the interim dividend of 55cents paid in March 2014, Shareholders will receive a total dividend of N$1.22 per ordinary share”
FNB also pocketed a whooping N$765m profit after tax indicating an improvement of 28.7% from last year.
The Chairperson added that, " Global growth is recovering, providing a good backdrop for sustained local growth. European economies are starting to grow. The US economy is growing well even though adverse weather impacted negatively on first quarter 2014 GDP. Namibia’s first quarter GDP was also tentative at 1.6% year on year in unadjusted terms."
This, the Board Chairperson said suggests that there are downside risks to the growth outlook for 2014.
"Crucially, there are indications that global volatility will continue and that notable headwinds may come from the livestock export environment. This is because South Africa introduced stringent import requirements in May this year, affecting livestock exports," he said.
According to FNB the primary sector, which accounts for nearly 16% of nominal GDP, was affected by global growth dynamics and declined during the first quarter of2014.
"Agriculture was down 19%; fishing by 13% year on year and mining by 3.8%. In contrast, those sectors that depend on domestic strength, or rather consumer demand, accelerated. Construction grew by 22% year on year and wholesale and retail trade was up 20.6% during the first quarter. Transport and communications also grew by 12%.
The bank also noted that the 50 basis points interest rate increase in South Africa in January exerted pressure on local funding costs, but the slightly lower average interest earned on advances was offset by higher margins on overnight placements, keeping interest margins steady.
The group’s main income was made by its banking section that dominated contribution to earnings.
FNB insurance brokers, FNB Unit Trust Services, and RMB Investments also contributed to the group’s performance. The group’s insurance Broker OUTSurance Namibia had a 26% growth in premiums the last financial quarter. This was driven by sales of personal lines products.
Also commenting on the financial performance Group Chief Executive Officer Ian Leyenaar said they are impressed with the performance of the financial giant.
“The performance was achieved by account and transaction and business volume growth rather than price increases, as a matter a fact many services remain free while others were increased in line with inflation” Leyenaar said.
The group has however suffered impairment losses which were due to prolonged low interest rates charged to its customers.
The total impairment charge was N$18.4m, N$5m lower than last year’s amount of N$23.4m. Specific impairment charges remained low, due to focus on quality asset growth and the effectiveness in recovering bad debts previously written off.
The group recorded a final dividend of 67cents per share, resulting in an ordinary dividend distribution of 122cents a share. This was a 22% increase from the previous year. FNB is still the largest company to be listed on the Namibia Stock Exchange. Shareholders of the company received 283m in dividends.
The Group also recorded a 24% increase in the use of electronic services. This is due to an increase in the number of accounts the bank has experienced in the last year. “The benefits of our strategy to create innovative electronic banking are passed on to the customers through lower charges” said Retail banking Executive, Ester Kali. N$1billion was also transacted through the group’s popular e-Wallet platform.
Leyenaar stressed that the group’s results were achieved due to the alignment of FNB Namibia to local market conditions, national development initiatives and growth opportunities supported by innovative FNB strategies.
With regard to banking licences imposed by the Bank of Namibia the group CEO has said that they welcome the competition and has said that this will force the company to be more innovative to keep ahead. Leyenaar further stated that BoN feared monopoly and that it would’ve liked to see the expansion of the Namibian banking sector.
By Theodor Uukongo for the Villager