Standard Bank Namibia has recorded a 53.7% increase in profit for the first half of 2023 (H1) to N$366.5 million.
The positive performance was attributed to continued interest rate hikes, as well as higher trading and transactional volumes during the period.
The increases in interest rates and a favourable restructure of the composition of deposits and current accounts lifted the banking group’s net interest income by 26.8% to N$864 million.
Non-interest revenue for the period under review increased by 9.8% to N$675 million, mainly due to 29.9% growth in trading revenue from increased client flows and volatility in the currency markets.
This was also supported by additional N$24 million in property-related revenue from the acquisition of a property investment company as part of a debt settlement transaction in 2022.
Credit impairment charges marginally decreased by 1.5% to N$130 million for the period.
Operating expenses increased by 7.6% to N$896 million, driven by increases in IT expenses, professional fees, amortisation costs, and premises costs.
“The increase relates to expenses incurred to support client growth strategies and the inclusion of expenses relating to the new property portfolio,” the bank said. “The group ensures that there is ongoing robust management and monitoring of the cost containment measures in place, as evidenced by the reduction in the cost-to-income ratio.”
Gross loans and advances to customers for the period decreased by 7.3% to N$21.6 billion, driven by a 75.3% decrease in sovereign lending. This was attributed to good performance on structured transactions, resulting in reduced exposure.
“Other loans and advances decreased following a redemption of preference shares and the acquisition of the property investment company as part of a debt settlement transaction,” added Standard Bank.
Loans and advances to banks increased by 39.9% as a result of increased placements with the Central Bank.
Standard Bank’s deposits and current accounts from customers grew by 10.5% to N$29.1 billion for the six months ended 30 June 2023. This was attributed to increases in current accounts, call deposits, and negotiable certificates of deposit. However, cash management accounts and savings accounts decreased.
“The group continues to implement its strategy to become compliant with the anticipated Basel III liquidity requirements and optimises its deposit mix,” the bank said.
Financial investments during the six months increased by N$692.7 million period-on-period and trading assets grew by 30.4%.
This was driven by additional treasury bills acquired in the banking book and trading book, respectively, to leverage an increase in market liquidity and in support of the anticipated Basel III high-quality liquid asset requirements.
“Growth in derivative assets was attributed to an increase in client demand for foreign exchange forwards to hedge their currency positions, as well as the mark-to-market movements on existing and new foreign exchange swaps. These client transactions are hedged out in the market which contributed to the increase in our derivative liabilities,” the bank said.
During the period, Ashley Tjipitua, Josephat Mwatotele, and Gerald Riedel were appointed to the Standard Bank’s board. Mwatotele is the former CEO and Portfolio Manager for Ashburton Namibia.
