Standard Bank Namibia’s profit after tax saw a substantial rise of 38 % to N$505.7 million during the half year.
Non-interest income during the period increased by 13.3% to N$765 million, while N$1 billion was generated from lending activities for the half year ended 30 June 2024, representing an 18.3% increase compared to the same period in the previous year.
The bank’s financial report indicates that the increase was driven by higher loan volumes and effective interest rate management.
“Net interest income increased by 18.3% to N$1.0 billion. This increase is attributable to the growth in loans and advances to customers of 5.0% and the realisation of funding optimisation strategies, which improved the net interest margin to 6.0% (31 December 2023: 5.2%),” the bank said in a statement accompanying financials.
Standard Bank said despite increased operating expenses of 9.5% to N$982 million, primarily due to IT investments and inflationary pressures, the bank managed to improve its cost-to-income ratio to 54.9%, down from 58.2% in the previous year. This reflects enhanced operational efficiency.
“Continued investments to enhance customer experience: automation initiatives to achieve operational excellence and improve efficiencies, investments to reinforce our risk and compliance enablement and enhance our digital capabilities,” the bank said.
The company reported that growth in transaction volumes and client activities had resulted in a 13.3% increase in non-interest revenue, reaching N$765 million during the period under review.
It added that trading revenue had grown by 37.7% to N$122.4 million, driven by increased transaction volumes and currency market volatility.
Other gains and losses on financial instruments had increased by 88.8% to N$75 million, primarily due to higher returns on excess liquidity invested in unit trusts and money market funds.
The bank’s credit impairment charges decreased by 29.3% to N$92 million largely attributed to the regularisation of group scheme home loan accounts previously classified as impaired due to technical arrears.
“Excluding these exposures. impairment charges increased by 7% period-on-period. The credit loss ratio (CLR) decreased period-on-period to 0.7%. Normalising credit impairments for the aforementioned group scheme exposures result in a CLR increase of 0.1% from 0.6% in 2023,” the report read.
The company reported that staff costs increased by 6.9% attributed to annual salary adjustments, an increase in the number of employees due to filling vacant positions, and variable remuneration linked to the group’s performance.
Additionally, other operating costs, excluding IT and staff costs, increased by 5.8% compared to the previous period.
“The group continues to focus on cost management to drive the attainment of a CTI ratio that is within industry and our targets,” the report indicated.
Furthermore, Standard Bank Namibia’s profitability, as measured by return on equity, increased to 18.6% during the half year to June 30, 2024 compared to 15.6% recorded in December 2023.
The bank declared an interim dividend of 68 cents per share, a significant increase from the 42 cents paid in the previous year.
