Standard Bank makes N$1 billion profit

Standard Bank Namibia Holdings Limited is still to catch up with industry leaders, however, it has crossed the N$1 billion in profit mark for the year ended 31 December 2024.

Dubbed the “blue” bank, this milestone is the first in its 109-year operating history in Namibia, largely due to the performance of the corporate and investment banking division, which contributed 57% of that profit.

Other Namibian banking groups, namely FirstRand Namibia and Capricorn Group, crossed this threshold in 2019, due in part to their larger balance sheets.

Standard Bank’s chief executive, Erwin Tjipuka, says several strategic initiatives spread across seven subsidiaries contributed to the profit.

“This impressive growth is directly attributable to a combination of strategic initiatives, funding optimisation, the successful scaling of our digital banking platforms driving increased transactional volumes, enhanced cost efficiency achieved through operational improvements, and a steadfast commitment to disciplined credit risk management,” says Tjipuka.

He walks away with N$4.5 million in remuneration, a million shy from the chief financial officer, Arlington Matenda at N$3.5 million.

Shareholders will receive a final dividend of 70 cents per share, payable on 23 May 2025 to all shareholders registered on 9 May 2025. This brings the total dividends declared in respect of 2024 profits earned to 138 cents per share.

This final dividend will cost N$365 million.

Standard Bank Group Limited owners will receive much of the dividend, and the remaining 25.1% of the issued share capital – split between the general public and employees – will receive the remaining N$91 million.

PERFORMANCE

At group level, although the corporate and investment banking leads profits at N$576 million, the business and commercial banking division has also turned tables, now reporting a profit of N$121 million from a N$37 million loss posted last year.

Personal and private banking recorded a N$30 million drop in profit, now settling at N$380 million which the company has attributed to operating costs that increased by 22%, underpinned by information technology costs which went up by 32% for the segment.Corporate and investment banking appears to be the core of the blue bank albeit operating on a rather thin loan book of N$5.3 billion of the total group loan book of N$28 billion.

Income statement line items show that net interest income rose by 14.8% – from N$1.8 billion to N$2.06 billion, while non-interest revenue has increased to N$1.6 billion from N$1.4 billion as a result of higher fees.

The main driver for the increase in net fee and commission revenue was the growth in transactional volumes.

Other key lines such as deposit and current accounts from customers increased by 10.9% to N$33.2 billion from N$29.9 billion.

This was attributed to an increase in demand deposits, term deposits and a decline in tradable certificates of deposit.

“The increase is a result of our efforts to diversify our deposit mix to meet strategic goals,” reads the company’s commentary.

The company closed off with a capital adequacy ratio of 18%, a decrease from the 20.7% recorded in 2023.

The group posted a 35.1% decrease in impairments, and the credit-loss ratio also improved from 0.59% to 0.37% in the last year.

“This is as a result of regularisation of group scheme home loan accounts which were previously impaired due to technical challenges, the realisation of our non-performing loan strategy in the current year and the improved quality of the book,” reads the company’s commentary.

Loans and advances to customers increased by 2.7% to N$23 billion, however, corporate lending recorded a decline of 2.5%, coming in at N$5.2 billion from N$5.4 billion in 2023.

SPEARMINT

The group also recorded substantial sales of property held under Spearmint Investments (Proprietary) Limited – in which the bank has a 100% share – which also helped bump up the profit.

According to the financial statements, the value of over 30 properties sold was N$301 million, with N$136 million worth of properties still in possession awaiting sale.

These properties were held as companies, a tactic sometimes used by corporations in Namibia to avoid paying transfer duties which are imposed on the transfer of properties.

The Ministry of Finance and Public Enterprises last year amended the Transfer Duty Act to close this loophole.

FOOTPRINT

The bank grew across major banking channels, posting 431 ATMs, 52 branches and facilitating close to nine million digital transactions last year – about 1 000 per hour.

Tjipuka says going forward, the bank will remain focused on continually improving and finding new ways to make an impact that matters: “We will continue to innovate and evolve, ensuring that our actions reflect our purpose – ‘Namibia is our home, we drive her growth’.”

Standard Bank Namibia’s shares closed off the results announcement date trading at N$9,56 per share.