FNB Namibia Holdings rates in N$900m profit

By Honorine Kaze
September 2015
Prime Business

First National Bank (FNB) Namibia Holdings’ 2015 financial year report shows a steady increase of the bank’s profits over a period of nearly a decade.

The Bank’s financial results show that they have grown their profit margin of N$ 257m in 2006 to N$ 999m in 2015.

FNB group Chief executive officer, Sarel van Zyl, who has taken over from former group CEO Ian Leyenaar, noted that by ensuring peace and stability, the Namibian government has created an environment in which business has been able to flourish.

“FNB is not the company it was when I left early in 2011 to head First Rand’s operations in neighboring Zambia. The business has grown from strength to strength. Testimony to the consistent performance comes from the magazine, The Banker, which has declared FNB to be the best bank in Namibia for six consecutive years. The advances book has doubled to N$ 22.8b over the last five years, and profit has followed the same trend to end 2015 at N$ 998.6m.”

Van Zyl explained that at the core of the success is the group’s commitment to a strategy that supports sustainable growth. It has been delivering innovative banking solutions which allow FNB to reach large segments of the previous unbanked population.

Some of the FNB’s success stories include those of the merger with Swabou, the growth of WesBank and the establishment of Rand Merchant Bank (RMB) franchise amongst others.

“We have been able to put a roof over the heads of thousands of Namibians. Our home loan book exceeded the N$10b mark this year, growing from only N$2b after the merger with Swabou in 2003. In a highly competitive market, this could not have been achieved without the committed people from the home loans division who offer clients exceptional service. FNB continues to lead the way with a total market share of 38.5%,” van Zyl notes.

He adds that the WesBank team has exceeded its challenging asset target by N$77m, ending the year under review with an asset base of more than N$3.5b.

As FNB keeps striving to lead in innovative ways of banking, over the years FNB has invested in paperless banking. However, the FNB Group Chairman, Claus Hinrichsen, notes there is still a long way to go.

“One concern is the increasing incidence of fraudulent activities in the banking industry such as card cloning and money laundering; FNB does not turn a blind eye to such negative aspects of every day banking. We combat such illegal activities, while recognizing that criminals keep abreast of highly technical advances in modern banking practice,” Hinrichsen said.

Regarding the year in review, the FNB Chief Financial Officer (CFO), Oscar Capelao, stated that the group’s total assets grew by 13.4% to N$ 29.8 b with the year end advances making up 76% of the balance sheet, reflected a year on year increase of 14.2% to N$ 22.8b.

“Averages advances grew 16%. Growth throughout the year tracked private credit extension closely. This grew by 14.8% according to the Bank of Namibia,” he said.

The mortgage loans increased year on year by 10.6% to N$10.7b and constitute 46% from 48% in 2014 of the FNB’s advance book.

Through enabling various innovative ways of banking, the bank generated N$2b in e-wallets transaction and N$249b in online banking payment, while they recorded N$4.5b in card swipes and N$14b in withdrawn of ATMs.

On the operating costs side, Capelao notes that the cost of staff took up about half of the operating costs, which increased by about 16.7%. He says, “This includes an average salary adjustment of 8% as well as 10% growth in complement to strengthen our risk and compliance team. In addition, the government introduced a training levy effective in April 2014.”

He adds that further operating costs were reflected in investment in infrastructure to ensure customer service exceeds expectation. During the year, the Grove mall, Kuisebmund, Okahandja and Maerua branches were opened, while 46 additional ATMs were installed around the country.