Standard Bank Namibia interims gloomy

MOST of Standard Bank Namibia’s profitability indicators show decreases for the six months ending in June this year, but shareholders will at least be paid a dividend of 16 cents per share come October.

The 16 cents are also less than the 21 cents distributed at the interim in 2020.

This interim dividend will be the fourth distribution since the company listed on the Namibian Stock Exchange in 2019, and the new dividend declaration will bring dividends paid after October to 78,37 cents.

Standard Bank released their interim unaudited and unreviewed financial statements last week, posting decreases on major profit indicators.

Compared to the 2020 interim statements, profit has decreased by 16,5% – a N$38 million drop to N$189 million.

It is the first time in over six years that Standard Bank has dropped below the N$200 million after tax on interim profits.

The low-interest environment is to blame, the company said in its commentary.

Not only has profit taken a dip, but net interest income has also reduced by 4,7% – from N$630 million to N$601 million.

Non-interest revenue has decreased by 2,7% to N$571 million.

The decreases in core earnings were matched with a 4,1% increase in operating costs.

“The main drivers are continued investment in information technology capabilities to deliver digital platforms that support our client value proposition, the impact of information technology services not being localised, incremental costs from the franchise architectural changes, and amortisation expenses relating to investments in key regulatory projects,” read the company’s commentary.

On the safe side, the group posted an 18,5% decrease in impairments, and the credit-loss ratio also improved from 1,3% to 1% over the six months.

Gross loans and advances to customers increased by 2,7% to N$23 billion, with corporate lending recording a strong growth at 11%, followed by other loans and advances at 7,4%, and mortgage loans at 2,8%.

Deposit and current accounts from customers decreased by 10,2% to N$23,7 billion in the period ending on 30 June, with the largest contributors being cash-management deposits, call deposits and negotiable certificates of deposits.

Amid these decreases, the company remains adequately capitalised, closing the six months with a capital-adequacy ratio of 15,2%.

The bank’s current chief executive officer, Mecia Geises, took over in May and it is not clear what her strategy for the company’s growth in the years ahead is yet.

The commentary, however, states that the company has updated its strategic priorities and will focus relentlessly on three aspects:

“We will transform client experience, execute with excellence, and drive sustainable growth and value,” it reads.

To achieve the above the bank intends to better understand its clientele, and apply its skills and digital capacities to meet clients’ needs, including their funding needs.

“We will deliver innovative and cost-effective products and services ourselves and in partnership with others, like Microsoft, Amazon Web Services and Salesforce, the world leader in client-engagement platforms, which will be the kernel of the way we will interact with our clients,” the company said.

Looking ahead, the bank said it is committed to building on the interims and “maintain strong cost discipline, carefully manage our credit risk, and remain steadfast in delivering on purpose”.

Total assets for the group stood at N$33,1 billion, matched against a liability bill of N$28,8 billion, and N$4,2 billion locked in equity.

Shares last Friday closed at N$6,47 – still below the initial public offering price.

Email: lazarus@namibian.com.na

Twitter: @Lasarus_A

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