By Staff Reporter
WINDHOEK, MARCH 7 — Nedbank Namibia has reported an excellent financial performance for 2022, achieving strong growth across all key metrics despite a complex and difficult external environment. Sebby Kankondi, chairman of Nedbank Namibia, said that the results demonstrate the resilience and adaptability of the bank’s business.
Headline earnings grew by 35% for the financial year ended 31 December 2022, driven by increased interest rates, growth in non-interest income, and good cost management. The bank also made progress on its strategic value drivers of growth, productivity, and management of risk and capital.
Nedbank Namibia saw growth trends across net interest income (NII), non-interest revenue (NIR), and client growth improve from the prior year. The increase in NII was driven by higher interest rates and a strong balance sheet capital and liquidity position. Solid growth from NIR was driven by continued recovery in client activity and increased client demand.
The bank also had good outcomes from forex and equity trading, with a total income of N$1.2 billion recorded for the year—an increase of 13% from the prior year. Profit after tax increased by 35% to N$275 million.
Operating expenses, of which 48% include staff costs, were in line with the average inflation rate for the year. This reflects a solid operating performance, with a focus on efficiencies. Kankondi said that the expenses incurred in fulfilling the operational mandates of the bank are overwhelmingly in favour of improving the lives and livelihoods of Namibians across a broad spectrum of society, including staff, families, businesses, and society.
The year saw earnings, excluding impairments, showing growth of 18%, indicating that impairments did not significantly impact the financial results for the period. The bank’s return on equity (ROE) increased to 10% from 8% in December 2021.
NedNamibia Holdings holds N$2 billion Common Equity Tier 1 (CET 1) capital, as the group remains appropriately conservative in an uncertain external environment. The strong momentum in the second half of 2022 likely pushed the economic growth rate to its highest level in seven years, buoyed by supportive global demand and higher domestic output. The Bank of Namibia (BoN) has revised its 2022 growth forecast to 3.9% from 3.2%, citing the more robust activity in diamond mining and tourism. However, growth will be dampened by less favourable global conditions, moderating to 2.7% in 2023 and 2.4% in 2024.
Inflation rose significantly in the second half of 2022, with global price pressures pushing it to a peak of 7.3% year on year in August, before easing slowly as international food and fuel inflation moderated. The Bank of Namibia hiked its repo rate from 3.75% to 6.75%, raising the prime lending rate to 10.5%. Nedbank expects the lending rate to peak at 11% in the second half of 2023.
Looking ahead to 2023, the bank’s managing director, Martha Murorua, said that a continuation of the good strategic and operational delivery experienced in 2022 should support strong growth. She noted that the bank’s clients continue to embrace digital transactions, with 46% digitally active customers at the end of December.
The bank plans to invest in new technology and processes to become more agile and efficient and to better respond to customer needs. It does not plan to reduce its branch network but to adapt to meeting both the digital and physical needs of its clients and to continue providing high-quality services. Additionally, the bank plans to expand its product offerings and increase lending activities to support the growth of small and medium-sized enterprises (SMEs).
Murorua emphasized the bank’s commitment to responsible lending and risk management, ensuring that it continues to maintain a strong financial position. Overall, the bank is optimistic about its prospects for 2023 and beyond, and remains committed to providing innovative and customer-focused banking solutions. – Namibia Daily News
