Total assets held by Namibia’s four largest local banks reached N$166.3 billion as of 30 June 2023, representing a 6% increase from the previous year’s N$157.4 billion, according to data from PSG Wealth Namibia.
PSG’s 2023 banking review report confirms that First National Bank (FNB) and Bank Windhoek Limited (BWL) remain the dominant players in the Namibian banking landscape, with total assets of N$58 billion and N$48 billion, respectively.
Standard Bank Namibia Holdings (SBNH) follows closely behind with N$38 billion in assets, while NedNamibia Holdings (NED) occupies fourth place with N$21 billion.
Highlighting the critical role banks play in driving economic growth, the report states: “Banks play a vital role in economic development by gathering small savings and channelling them into productive ventures, fostering increased production, employment, sales, and prices, thus propelling economic growth.”
The report underscored the strategic investments made by banks across sectors to ensure optimal resource utilisation and regional development.
PSG highlights the impact of changes in bank rates, stating, “In June 2023, Namibia’s local banks held a decreased percentage of total assets relative to nominal GDP, dropping from 80.4% to 73.3%, underlining the significance of the country’s banking sector and its potential impact on the local economy.”
Meanwhile, the report details the market share and growth rates of individual banks, noting that FNB retains its place as a market leader with 35.1% market share of total assets, followed by BWL at 29.1%.
“SBNH, the third biggest bank in terms of assets, maintains a stable market share at 23.1%. NED’s the smallest in terms of assets, market share reduced with 1% in 2023,” the report said.
It further delves into the compounded annualised growth rate, revealing, “FNB shows the highest asset growth over the past fivea years, followed by BWL, whilst NED the lowest growth rate.”
PSG revealed that in terms of FirstRand Namibia’s performance, “CGP’s basic earnings per share increased by 31.8%, and dividends per share declared rose by 39% to 100cps from 72cps in the previous year.”
Thus, FNB’s net interest income saw a 22.4% year-on-year increase, contributing to a net interest margin of 5%.
“FNB recorded the highest gross advances growth among local banks at 10.3% year-on-year. However, the non-performing loans ratio worsened to 5.1% from 5.5%, and the credit loss ratio deteriorated to 0.6% from the previous year’s 0.3%,” the report noted highlighting challenges.
SBNH’s non-interest revenue rose by 9.8% y/y in the first half of FY23, primarily due to a 29.9% increase in trading income from increased client activity and volatility within currency markets, along with an additional N$24 million in other income (22% y/y growth) associated with properties.
Income growth improved cost efficiency, with the cost-to-income ratio decreasing for the first time in 5 years to 58.2%, below SNO’s target of 60%.
“SNO’s net interest income saw a 26.8% y/y increase in the first half of FY23, driven by a 300bp increase in Namibia’s repo rate during this period, which led to a higher net interest margin of 5.5% (1HFY22: 4.6%),” added the report.
Similarly, BWL’s contribution is highlighted with CGP’s gross loans and advances increased by 5.2%, with growth in Bank Gaborone of 10.4% and BWL by 2.1%.
“Non-interest revenue (NIR) for the group increased by 13.1% for the second consecutive year, boosted by an increase in transaction income due to higher transaction volumes. BWL’s NIR increased by 12.5%, contributing 73.1% to the group’s NIR,” said PSG.
NedNamibia Holdings, which is not listed in Namibia and is not required to publish full interim results reports, saw a 104% year-on-year increase in profit after tax in the first half of FY23.”
“This growth was driven by a 29.6% increase in net interest income and an 8.4% increase in non-interest revenue. The net interest margin remained stable at 4.7% in the first half of FY23,” PSG noted.
