6 September 2019
Transforming old costs into new opportunities, Creating shared prosperity for all stakeholders
FirstRand Namibia, in its 2019 end-year results, reported an increase in profit before tax by 2.2% to N$1.58 billion (2018: N$1.55 billion). The group’s revenue performance demonstrates that the investment in digitisation and customer-centric service is bearing fruit. Cost to income ratio increased to 52.9% (2018 normalised: 50.3%), which remains commendable. Cost growth was contained at 4.4% for the year, demonstrating the efficiency focus in the current year.
“The impact of the challenging economic climate was certainly felt in the financial services sector. Credit demand showed improvement although it was still relatively low in comparison to the past few years”, says Oscar Capelao, Chief Financial Officer of FirstRand Namibia.
Return on average equity decreased to 20.8% (2018: 22.1%), in line with the long-term target range of 21% to 24%.
Headline earnings increased by 3.0% to N$ 1 071 million. Earnings per share increased to 409.9 cents (2018: 398.1 cents).
“The group delivered resilient, high quality earnings on the back of reasonable topline growth, which has translated into a strong return profile and it is well-positioned for the continued emergence of the credit cycle. We will continue to be agile to respond to the many uncertainties that are likely to arise on the back of our continued prudent approach to doing business, where we do not chase market share at the expense of returns”, adds Capelao
Net interest income grew by 10.5% to N$2 012.2 million (2018: N$1 820.8 million). Interest expense increased by 5.1%, while interest income grew by 7.9%, driven by the subdued growth in advances during the year and the continued focus on growing retail deposits as opposed to the more expensive wholesale funding.
Normalised NIR increased by 3.8%, reflecting a fee and commission income growth of 4.8%, supported by higher volumes across digital and electronic channels. Although business is reaping the benefits of customer migration to digital channels, this addition to NIR is off-set by a fall in cash-related NIR, impacted by the reduction in volumes of cash transactions at traditional channels and the impact of the recession.
“We continue to place a substantial amount of effort and resources into building an innovative financial services group that is centred on the customer of the future, putting the customer at the core of our operations. This goes beyond providing basic banking services, but rather creating an ecosystem that is the extension of a customer’s interaction with his ability to transact to his ability to create and growth his/her wealth”, says Sarel van Zyl, CEO of FirstRand Namibia.
“Leading financial services in Namibia while preparing for the future of banking, requires focus, determination, clarity of vision and a concerted daily drive to cut costs where appropriate. Our 2018-2019 results are a clear indicator of the team’s strong stewardship of our current resources in a challenging environment, a clear indicator of knowing where we are going – a leading, financially inclusive, profitable, end to end financial services offering, and a clear indicator of our ability to execute on our strategy efficiently year on year”.
“As FirstRand Namibia, we remain excited about the future, and our people and our energies are ready to take forward the vision of shared prosperity for all stakeholders. This we will do while creating our own ‘next’, by widening our reach digitally and through partnerships nationally, ensuring a continuous, functionally innovative, personalised basket of services to each of our segments, and through continued transformation of old costs into new opportunities” concludes van Zyl.
For more information, please contact Elzita Beukes, Communications Manager at FirstRand Namibia on telephone: (+264 61) 299 2125, firstname.lastname@example.org