FirstRand Namibia reported a 10.8% increase in headline earnings for the six months ended 31 December 2024, reaching N$926 million, up from N$836 million in the previous year.
The financial performance reflects the group’s resilience and strategic focus on sustainable growth and cost management, with credit remaining within appetite.
“FirstRand Namibia achieved a revenue growth of 3.2%, with the return on equity improving year-on-year to 29.6% from 27.8%. The increase in headline earnings reflects strong operational performance and strategic growth initiatives, resulting in a notable rise from N$836 million in 2023 to N$925 million,” noted the interim results for the period.
Net interest income (NII) rose by 13.0%, reaching N$1 655 million from N$1 464 million, despite a 75-basis-point drop in the repo rate during the period. Gross advances increased by 8.5% to N$41 185 million, compared to N$37 957 million in 2023. Interest earned on advances climbed 6.0%, from N$2 192 million to N$2 324 million, while deposits grew by 6.6% to N$47 881 million from N$44 926 million.
“Deposit holders earned N$867 million (2023: N$897 million) in interest across all deposit accounts for the period, reflecting a decline of 3.4%. This decrease was primarily driven by the lower repo rate, which led to a reduction in interest rates offered on deposit accounts,” said the group.
Impairment charges increased year-on-year to N$263 million from N$191 million, with the credit loss ratio rising to 0.7% from 0.5%. “This increase is attributable to specific impairments and was anticipated in the deteriorating economic climate and continuation on from the previous financial year,” the results noted.
Non-performing loans (NPL) rose to N$2 482 million from N$1 995 million, with an NPL ratio of 6.0%, slightly improving from the 6.1% reported as of 30 June 2024.
Non-interest revenue (NIR), including insurance service results, grew by 9.8% to N$1 344 million from N$1 224 million, driven by an 11.3% increase in fee and commission income, supported by customer base expansion and higher transaction volumes.
“The bank seeks to maintain an optimal balance between NII and NIR to foster a diversified revenue stream coupled with its strategic focus on its insurance and investment and wealth management offerings that further support diversification,” said FirstRand.
As of 31 December 2024, NII accounted for 55.2% of revenue, up from 54.5% in 2023, while NIR made up 44.8%, compared to 45.5% in the previous year. Net fee and commission income represented 84.7% of total NIR, an increase from 83.8% in 2023.
Active customers grew by 7.2% to 787 294, compared to 734 270 in 2023, while transaction volumes rose 8.3% to 26 million from 24 million.
Operating expenses increased by 8.1% to N$1 392 million from N$1 287 million, bringing the cost-to-income ratio to 46.4%, down from 48.3%, keeping it below the 50% threshold.
“Salary costs are integral to maintaining high service standards and achieving strategic goals and is up 5.0% to N$791 million and account for 56.8% of total operating expenses. The increase in staff cost is due to the annual salary increase, effective August 2024, that averaged 5.8%. Headcount increased by 2.9% from 2 288 staff members to 2 335,” the report stated.
