Bank Windhoek stays afloat in stormy 2009

By: STAFF REPORTER

LAST year’s economic turmoil didn’t derail Bank Windhoek and the financial institution managed to grow its net profit after tax earnings for the year ended June 30 2010 by 18 per cent compared to the previous book year.

Net profit after tax earnings for 2009-10 totalled N$247,4 million, Bank Windhoek said yesterday, releasing its latest financial results.
The group’s total assets grew by 16 per cent, which was underpinned by the growth in gross loans and advances of 16 per cent, as well as increasing market share to over 30 per cent.
“From our humble beginnings in 1982, Bank Windhoek has been on a steady growth path and succeeded year on year to surpass shareholder’s expectations in a very competitive environment.  Today, Bank Windhoek is the second largest bank in Namibia with total assets of N$14 billion,” Managing Director James Hill said.
Interest income for the year was N$1,3 billion, whilst interest expense for the year was N$733 million, resulting in a net interest income of N$568 million.
The decrease in interest income and expense from the previous financial year was due to the decreases in repo rate towards the end of the 2009 financial year. However, net interest income increased by 14 per cent due to the additional effect of the maturity of fixed interest long-term funding which further decreased interest expense from the previous year.
Non-interest income totalled N$323 million, an increase of 13 per cent, “mainly due to the increased transactional volumes through our electronic channels”, Bank Windhoek said.
The impairment charge on loans and advances through the income statement amounted to N$23 million, which represents a 15 per cent increase from the previous year, but compares favorably to the advances growth of 16 per cent, the bank said.
“As part of the recovery and rehabilitation process after the global recession, there has been a concerted effort by Bank Windhoek to focus on the quality of loans and advances. As a result of this, the impairment charge through the income statement has been contained at 0,2 per cent of gross loans and advances, which is an exceptional performance measured by any standards,” it said.
Bank Windhoek said the recovery of the Namibian economy was apparent in the increase of gross mortgage loans which grew by 26 per cent over the previous year.
“Irrespective of this growth in loans and advances, the quality of its advance book remains the group’s primary objective and an underlying principle when granting new facilities,” it said. Bank Windhoek’s operating expenses increased by 15 per cent, which was mainly due to staff costs. “This investment in human capital is aligned with the group’s strategy to ensure that the right people are employed and retained,” the bank said.
With the implementation of Basel II, the requirement to hold capital for operational and market risk was expected to negatively impact the risk-based capital ratios, it continued.
“The impact was however not significant. The total risk-based capital ratio decreased from 13,6 per cent in the previous year to 12,6 per cent in the current year, still above the required statutory levels,” Bank Windhoek said.

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