Letshego Holdings (Namibia) recorded a N$303.3 million profit after tax for the year ended 31 December 2021, down 5.5%.
However, despite a decline in profits, the group declared a final dividend of 29.52 cps payable on 03 June 2022.
According to Letshego’s financial results released this week, the company’s earnings and headline earnings per share for the period dropped 5.5% y/y from 64.2cps in FY20 to 60.6cps in FY21.
Total income for the period rose by 5.7% y/y to N$826.0 million in FY21, mainly attributable to lower interest income from lending activities in the second half of the year, while interest income from advances to customers declined by N$37.9 million or 6.1% y/y to N$582.3.
Despite the decline in income from lending activities, net interest income after impairments increased marginally by 0.1% y/y to N$483.8million, following a credit impairment release of N$16.5 million.
The financial services group reported a strong increase in advances to customers, with the loan book growing by N$669.9 million or 18.6% y/y to reach N$4.06 billion at the end of the period, with most of the growth emanating in the second half of the year, increasing by N$410.0 million in the last six months.
Letshego’s total operating expenses for the period grew by 55.7% y/y to N$365.5 million in FY21, outpacing the growth in income, mainly attributable to an increase in management fees and insurance premiums which increased by 60.1% y/y to N$56.4 million and 690.9% y/y to N$73.8 million, respectively.
The company’s cost-to- income ratio resultantly increased from 30.1% in FY20 to 44.2% in FY21.
Letshego reported very strong deposit growth for the year, increasing by 105.5% y/y to N$386.1 million in FY21, attributed a significant growth in term deposits which increased 326% y/y to N$363.3 million while current account deposits declined 78% to N$22.7 million.
The financial services company borrowings from commercial banks increased by N$426 million.
Analyst views
IJG Securities
“Overall, the results came in roughly in line with our expectations, with growth in advances exceeding our forecasts. LHN should see a strong increase in interest income, should the company be able to reprice the loans in line with the expected rate hikes this year.”
