FNB posts solid financial results

THE merger with Swabou in July 2003 has brought significant benefits for the First National Bank Namibia (FNB) Holdings Group of Companies, as reflected in the financial results for the year ended June 2006, which saw operating income before tax shoot up by 20 per cent.

Operating income before tax for the 12 months to June 30 2006 went up to N$372 million from N$309,5 million of the previous corresponding period. Headline earnings per share increased by 21 per cent to 95 cents compared to 78,7 cents of 2005.Earnings attributable to ordinary shareholders increased by 21 per cent to end at N$255,6 million from N$210,9 million.The major contribution to headline earnings of 86 per cent came from the main component of the Group, which is its banking operations.The rest was from life assurance and short-term insurance.FNB Group Chief Executive Officer Vekuii Rukoro said change was vital in a dynamic business environment.”It is the vital ingredient needed to give us a sustainable base for future organic growth.Against the background of continual and positive change, the Group has responded well, as reflected in the solid results reported.”Rukoro said the period under review was characterised by high business confidence, low interest rates and high demand for credit.The black economic empowerment deal entered by FNB two years ago has to date created a value of N$24 million, and the vesting of the first tranche will be in December.Rukoro also noted that there were still challenges that the company needed to iron out which included localising operations and services and the controversial issue of bank charges.He said, “Localisation of functions, especially if business driven, must be effected …and to the benefit of our clients.”Rukoro said the company’s aim to draw in poor people living in the rural areas had paid off with the launch of a new banking product, Cardwise, last year, which targets low-income earners.Within a year, according to Rukoro, over 60 000 Cardwise accounts have been opened.The FNB Namibia Group is 40 per cent locally owned, which will increase to 45 per cent with the conclusion of the BEE deal.The total asset base of the Group is N$9,6 billion and the company employs 1 433 people.Headline earnings per share increased by 21 per cent to 95 cents compared to 78,7 cents of 2005.Earnings attributable to ordinary shareholders increased by 21 per cent to end at N$255,6 million from N$210,9 million.The major contribution to headline earnings of 86 per cent came from the main component of the Group, which is its banking operations.The rest was from life assurance and short-term insurance. FNB Group Chief Executive Officer Vekuii Rukoro said change was vital in a dynamic business environment.”It is the vital ingredient needed to give us a sustainable base for future organic growth.Against the background of continual and positive change, the Group has responded well, as reflected in the solid results reported.”Rukoro said the period under review was characterised by high business confidence, low interest rates and high demand for credit.The black economic empowerment deal entered by FNB two years ago has to date created a value of N$24 million, and the vesting of the first tranche will be in December.Rukoro also noted that there were still challenges that the company needed to iron out which included localising operations and services and the controversial issue of bank charges.He said, “Localisation of functions, especially if business driven, must be effected …and to the benefit of our clients.”Rukoro said the company’s aim to draw in poor people living in the rural areas had paid off with the launch of a new banking product, Cardwise, last year, which targets low-income earners.Within a year, according to Rukoro, over 60 000 Cardwise accounts have been opened.The FNB Namibia Group is 40 per cent locally owned, which will increase to 45 per cent with the conclusion of the BEE deal.The total asset base of the Group is N$9,6 billion and the company employs 1 433 people.