Banks Keep Getting Fat

THE total assets of the banking sector continued to grow at a robust pace. Total assets grew at 13,2% at the end of December 2014 compared to 14,8% at the end of December 2013.

This is according to the Namibia Financial Stability Report released by the Bank of Namibia this week.

Net loans and aances, which constituted 74,5% of total assets, remained the main driver of asset growth, rising by 16,9% year-on-year at the end of December 2014.

The level of non-performing loans, however, increased year-on-year. Non-performing loans increased at an annual rate of 9,8% to N$821,3 million, largely due to the increase in non-performing mortgages. Overall, the composition of non-performing loans did not change significantly, with the notable changes being the increase in the relative share of mortgages from 53,8% to 55,3%, and the decrease in the relative share of overdrafts from 14,9% to 12,5%.

During 2014, the banking sector continued to hold liquid assets well in excess of the statutory minimum liquid asset requirement of 10% of average total liabilities to the public. The liquidity ratio increased to 12,5% at the end of December 2014 from 11,7% at the end of December 2013. The banking sector had surplus liquidity holdings of N$2 billion over the required levels.

During 2014, the banking sector recorded an increase in its total income. Total income grew at an annual rate of 19,6% to N$1,8 billion. This growth was largely driven by net interest income, which rose by 24,1% and represented a slightly higher share of 56,8% in total income from 56,2% at the end of 2013.

Source : The Namibian