Fnb Earnings Up to N$765 Million On Streamlined Operations

FNB Namibia headlines earnings rose by 28,7% to N$765 million in the financial year ending 30 June.

Aances grew by 17,8% to more than N$20 billion resulting in the bank to declare a final dividend of 67 cents per share, resulting in an ordinary dividend distribution for the year of 122 cents a share, a 22% increase. Group CEO, Ian Leyenaar. Leyenaar said ‘the performance was achieved by account and transaction and business volume growth rather than price increases.’

“As a matter of fact, many services remain free while the others were increased in line with inflation,” he said.

FNB remains the largest listed company on the Namibia Stock Exchange (NSX). According to Oscar Capelao, chief financial officer, FNB’s top performance is underpinned by the design of relevant business strategies and the effective execution thereof, which resulted in profit before tax that passed the one billion mark to N$1,17 billion while profit for the year increased by 29% to N$785 million compared to N$608 million in 2013.

“The increase in earnings per share to 298 cents (2013: 230 cents) confirms the popularity of FNB shares. All other key ratios also improved with return on average equity improving to 30,9% (2013: 25.9%), return on average assets was 3,2% (2013: 2,8%) and cost to income ratio improved to 47% (2013: 49%),” the bank said.

The bank said the 50 basis point interest rate increase in South Africa in January 2014 put pressure on local funding costs, but the slightly lower average interest earned on aances was off-set by higher margins on overnight placements, keeping interest margins steady.

“Net interest income increased by 15,5% to N$1,13 billion (2013: N$985 million), on the back of an 18% growth in average aances and 17% growth in average deposits. This was despite a 0,06% margin squeeze, mostly due to a higher cost of funding, up 0,07% year on year” said Capelao.

The total impairment charge was N$18,4 million (2013: N$23,4 million), which includes an N$7,5 million portfolio impairment charge.

“Specific impairment charges remain low, as a result of a continued focus on quality asset growth and the effectiveness in recovering bad debts previously written off,” the bank said.

Ester Kali, executive retail banking, said the bank recored a 24% growth in the use of electronic delivery channels.

The 21% growth in the number of accounts over the past year has driven the 23% increase in fee and commission income, she said.

“The benefits of our strategy to create innovative electronic banking are passed on to customers through lower charges. Worth noting is that despite the opening of three new branches, Arandis, Khomasdal and Kuisebmond this year, electronic banking increased by 28% while traditional banking operations increased by 3%,” she said.

Source : The Namibian