FNB NAMIBIA HOLDINGS LTD You win sometimes, you lose other times.
Shareholders of
This dividend for the 2020 financial year is the lowest in a long time and comes at a time when markets are stressed across the board.
Many financial companies have not declared dividends for this year, and others have cancelled earlier announced dividends, citing prudence due to uncertainties presented by Covid-19.
The last time
The company was at the time known as
In May, the
As predicted,
Late last month, the group announced to shareholders to expect group earnings to drop by between 15% and 25% for the financial year ending
This was due to a higher credit impairment charge, the company said.
A glance at the released financial statements show that profit for the year has decreased from over N$1 billion recorded last year to N$833 million - a 23% drop.
This has led the return on equity to consequently slump to 16% from 20,8%, the financial statements show.
The company said taking into account the repo rate and prime rate reduction during the last six months, which saw the two rates effectively dropping 275 basis points, net interest income remained flattened out when compared to last year at N$ 2,01 billion, recording a small dip of 0,4%.
Non-interest income for the 2020 financial year was at N$1,9 billion, from N$1,8 recorded last year, the increase the group said is attributable to increased fees and commission income due to growing electronic transaction volumes and ongoing customer acquisition
The impairment, which is blamed for the drop in profits, doubled to N$559,7 million from N$214,8 million reported last year, reaching 1,79% of gross advances from the 2019 ratio of 0,72%.
The company said the increased pressure on customers due to Covid-19 also ultimately impacted the group's impairments.
The Outsurance owner closed the year with a loan book of N$30 billion down from N$31,5 billion at the end of 2019, but overall assets grew by 3,8% to N$45,9 billion from N$44,2 billion recorded last year.
On deposits, this liabilty also grew to N$38,4 billion way ahead of advances. FNB pushed this increase as demand for savings and investment products hiked from individuals' tightening savings. Last year, deposits closed the financial year at N$35,8 billion.
Indicators all show that expenses were contained well, and if it were not for the increased impairment, the company would have registered possibly another N$1 billion profit.
COVID PERIOD
The Namibian reported last month that between April and June this year, all commercial banks extended loan-repayment holidays of around N$9,2 billion, and this had eaten into their earnings, which averaged at N$3,3 billion per quarter.
Released figures show that most of FNB Namibia's lending was extended to finance mortgages - a class of lending that has suddenly become troublesome for commercial banks in the country.
The Namibian reported in June that all commercial banks in the country had issued N$53 billion worth of property loans, and were then increasingly seeing poor to no performing loans.
Overall loans not paying any interest or the capital amount were at N$5 billion at the end of March this year, or 5,2% of the total loan book.
According to the released financials the group provided Covid-19 relief to clients amounting to advances of N$1,46 billion, with the repayment cash flow amounting to N$122,8 million.
"The net interest income was down N$97 million on average the last three months following the monetary policy interventions by cutting the repo rate by 225 basis points since March," read an extract of the financials.
This year's cleaned headlined earnings are at N$867 million, down from N$1 billion registered last year.
The company also registered the lowest market capitalisation in the last five years at N$8,5 billion, down by almost N$5 billion when compared to N$12,7 billion recorded at the end of the 2016 financial year.
This drop had wiped off at least N$2,9 billion worth of market capitalisation - and had its impact felt afar, including the value of investments held by the
Board chairperson Inge Zaamwani-Kamwi said amidst a tough global economic backdrop, impacted by Covid-19 and a financially challenging environment,
"We were selective in our balance sheet expansion and placed emphasis on protecting margins in a low rate environment, while considering the well-being of our staff and customers alike," she said.
Its shareholders are
The full financial statements and the integrated annual report is available on the group's website.
Email: [email protected]
Twitter: @Lasarus_A
Copyright The Namibian. Distributed by AllAfrica Global Media (allAfrica.com)., source
