Bank Windhoek posts over N$1 billion in pre-tax profit

Bank Windhoek Holdings Limited’s consolidated financial results for the year ended June 30, 2015 showed a year-on-year increase in profit before tax of 21.5 percent to N$1 067.1 million, compared to N$878.3 million in 2014.

“Our success can largely be attributed to our loyal and growing customer base and leveraging off our local insight and decision-making to remain locally relevant, while offering internationally competitive products and services”, said Managing Director Christo de Vries.

The group’s profit after tax grew 20.5 percent to N$753.0 million, compared to N$624.9 million in 2014, representing a three-year compound annual growth rate of 23.2 percent.

Net interest income after loan impairment charges increased by 17.6 percent to N$1 208.7 million (2014: N$1 027.8 million) on the back of strong loans and advances growth of 16.7 percent, together with an improvement in the net interest margin.

Non-interest income increased by 19.4 percent to N$811.9 million (2014: N$679.7 million) despite the implementation of zero cash handling fees on certain accounts during the year under review. The group said this increase is mainly due to strong growth in transaction volumes and income from trading activities, cards and electronic channels.

The group also continues to improve its efficiency and diversification ratios with non-interest income covering 77.9 percent (2014: 74.3 percent) of operating expenses and contributing 40.2 percent (2014: 39.8 percent) of operating income.

Operating expenses increased by 13.9 percent to N$1 042.2 million compared to the prior year (2014: N$914.6 million). The increase above inflation is mainly due to increased headcount to provide for growth; operational banking expenses, mainly due to increased transaction volumes; and ongoing investment in technology. The group said it continues to invest in existing and new offerings to ensure sustainable improvement in customer experience and financial performance.

Meanwhile, the growth in operating income of 18.3 percent exceeds the growth in operating expenses of 13.9 percent. As a result of this positive operating performance, the cost to income ratio improved from 53.6 percent to 51.6 percent.

The group’s total asset growth of 17.6 percent is driven by the growth in loans and advances of 16.7 percent, which is mainly due to growth in overdrafts and commercial mortgage loans. The growth in loans and advances was slightly above the Namibian credit growth, allowing the group to maintain its market share.

Bank Windhoek Holdings Limited remains well capitalised with a total risk-based capital adequacy ratio of 15.8 percent (2014: 15.8 percent), well above the minimum regulatory requirement of 10 percent.

“Our focus in the coming year will remain on our customer-centric strategy and culture, whereby we continue to differentiate ourselves through our unique service offering and customer experience. We recognise the value of continuous engagement between the group and its employees in achieving superior performance through loyal and satisfied employees.

“Our investment in digital channels will ensure that we not only keep up with market demands but also to lead with new technology. We will continue to work towards our goals responsibly by adhering to the highest ethical standards. We will also continuously engage our stakeholders as we believe that sustainability comes from a firm focus on profits, our people and the planet,” said de Vries.

“The outlook for Bank Windhoek Holdings remains positive and we look forward to build on the successful track record and solid foundation of our group.

The group is well-positioned for the new financial year, with a clear plan to deliver future growth and value for all its stakeholders through a well-defined strategy,” de Vries concluded.