Wrap Text
The Standard Bank of Namibia - Unreviewed Consolidated Interim Results For The Six Months Ended 30 June 2024
The Standard Bank of Namibia Limited
Incorporated in the Republic of Namibia
Registration number: 78/01799
("The Company")
Issuer code: STINM
UNREVIEWED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2024
June 2024 June 2023 December 2023
Unreviewed Unreviewed Audited
Profit after tax attributable to ordinary shareholders (N$'000) 505 348 365 216 766 267
Total comprehensive income attributable to ordinary
507 266 361 404 761 128
shareholders (N$'000)
Headline earnings (N$'000) 505 214 364 714 783 522
Number of ordinary shares in issue 522 471 910 522 471 910 522 471 910
Weighted average number of ordinary shares in issue 522 471 910 522 471 910 522 471 910
Basic earnings per share (cents) 97 70 147
Headline earnings per share (cents) 97 70 150
Ordinary dividend declared (cents per share)
68 42 58
(Refer to "Dividends" paragraph in full announcement)
Ordinary dividend declared (N$'000)
355 281 219 438 522 471
(Refer to "Dividends" paragraph in full announcement)
Net asset value per share (cents) 1 009 936 970
Restatements
During the period, the group noted the following restatement relating to the group's previously published results:
• Effects of exchange rate differences on cash and cash equivalents
During the period, it was noted that a portion of the effects of exchange rate differences on cash and cash equivalents was erroneously disclosed under
cash flows from other operating activities instead of effects of exchange rate differences on cash and cash equivalents, as required by paragraph 28 of
IAS 7 - Statement of Cash Flows. The allocation was corrected, and the balances of the relevant lines were restated. This restatement had no impact
on the condensed consolidated statement of financial position and condensed consolidated income statement.
• Reallocation between classes of loans and advances
Commercial property loans with a gross carrying amount of N$532.1 million for FY23 and N$594.5 million for 1H23 were reallocated from "Home
services" to "Other loans and advances" due to a misallocation. This restatement is only for presentation purposes and has no impact on the group's
condensed consolidated statement of financial position, condensed consolidated income statement, condensed consolidated statement of cash flows
or any disclosed ratios.
Highlights from the group's results for the six months ended 30 June 2024
• Funding optimisation, higher trading and transactional volumes have contributed to the group's strong performance in the first half of 2024. Profit
grew by 38.0% period-on-period to N$505.7 million. The cost-to-income ratio decreased to 54.9% from 58.2% in June 2023 and ROE improved from
15.6% in December 2023 to 18.6% in June 2024.
• 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%).
• Growth in transaction volumes and client activities resulted in a 13.3% increase in non-interest revenue to N$765.1 million. Trading revenue growth
of 37.7% to N$122.4 million was driven by increased transaction volumes and volatility in the currency markets. Other gains and losses on financial
instruments increased by 88.8% to N$75.0 million, mainly due to the higher returns on excess liquidity invested in unit trusts and money market
funds.
• Credit impairment charges decreased by 29.3% to N$92 million. The decrease is largely as a result of the regularisation of group scheme home loan
accounts, which were previously 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
results in a CLR increase of 0.1% from 0.6% in 2023. Given the difficult macro-economic environment (prolonged high interest rates and elevated
inflation), the non-performing loans (NPLs) ratio increased to 6.06%, but still remaining within the industry average of 6.1% as at 31 March 2024.
Excluding one large client exposure, which has been disposed of and funds expected subsequent to period-end, the NPL ratio would be 5.6%. Inflows
to NPLs are mainly from home loans and other secured lending. Our overall and specific debt provision coverage ratios are 4% (June 2023: 4%) and
37.0% (June 2023: 36.8%) respectively. The group continues to closely monitor the CLR and the progress made on short- and long-term strategic
initiatives on managing non-performing loans.
• Inflationary increases and continued investment in technology caused operating expenses to increase by 9.5% to N$982 million.
The 23.3% increase in IT expenses was mainly driven by:
o continued investments to enhance customer experience;
o automation initiatives to achieve operational excellence and improve efficiencies;
o investments to reinforce our risk and compliance enablement and enhance our digital capabilities; as well as
o the impact of the depreciation of the Namibian dollar against major currencies on services provided by foreign denominated cross border
vendors.
Staff costs increased by 6.9%, driven by annual increases, a higher headcount due to filling of vacant positions and variable remuneration that
increased in line with the group's performance.
Other operating costs excluding IT and staff costs increased by 5.8% period-on-period.
Operating expenses growth was well below total income growth, which resulted in a positive JAWS ratio of 6.6% and a decline of the cost to
income (CTI) ratio to 54.9%, which is tracking closer to industry average of 53.1% (as at 31 March 2024). The group continues to focus on cost
management to drive the attainment of a CTI ratio that is within industry and our targets.
• Notwithstanding the relatively subdued credit demand, as evidenced by a Private Sector Credit Extension of 1.8% as at 30 June 2024, gross loans and
advances to customers registered growth of 5.0% period-on-period to N$22.7 billion. The increase was mainly driven by the 35.3% increase in
corporate lending and the 5.4% increase in vehicle and asset finance. Gross loans and advances to banks decreased by 29.3%, driven by customers'
call deposit withdrawals, deployment of funds into Eurobonds as part of an endowment hedge and placement of additional funds to the operational
account with the central bank. This decrease is aligned to the reduction in call deposits, an increase in financial investments and an increase in cash
and balances with the central bank.
• Deposits and current accounts from customers decreased marginally by 1.5% to N$28.7 billion for the six months ended 30 June 2024. This was
driven by decreases in call deposits and negotiable certificates of deposit (NCDs, in line with our funding optimisation strategy). The decrease was
offset by a significant increase of 33.1% in current accounts and an increase of 13.5% in cash management deposits. The group is focused on growing
its funding base through different initiatives undertaken.
• Financial investments increased by N$1.7 billion period-on-period, driven by additional government bond purchases in the banking book to meet
Basel III high quality liquid asset requirements and endowment hedging, as well as additional placements in money market funds. The decrease in
derivative assets of N$134.2 million is attributable to the maturity of foreign exchange forwards taken by clients to hedge their currency positions.
These client transactions are hedged out in the market and caused the corresponding decrease in derivative liabilities of N$137.6 million.
• The group maintained strong capital ratios, with a total capital adequacy ratio of 18.9% and a common equity tier 1 ratio of 16.9%. The group
proactively manages its capital levels to support business growth and maintain depositors and creditors confidence. The capital management strategy
ensures that regulatory requirements are always met and that value is created for shareholders.
Dividends
Notice is hereby given that an interim cash dividend for the six months ended 30 June 2024 of 68 cents per ordinary share was declared on 6 August 2024.
Last day to trade cum dividend: 6 September 2024
First day to trade ex-dividend: 9 September 2024
Record date: 13 September 2024
Payment date: 27 September 2024
Board changes during the year
The board chairman, Herbert Maier, retired after serving on the board for more than 10 years. It is with heartfelt gratitude that we thank him for his contributions
to the group, and we wish him well in the next chapter of his journey. Isac Hiriua Tjombonde, an independent non-executive director, was appointed as the new
board chairman. We welcome Siphiwe Themba Bruce Madonsela, a Standard Bank Group Limited (SBGL) appointed director, and Arlington Tendai Matenda,
the chief finance and value management officer, to the board and look forward to their contributions to the success of the board.
Outlook
The world economy is expected to continue recovering at a subdued pace. The International Monetary Fund's July 2024 World Economic Outlook update
estimates global economic growth of 3.2% for 2024 and 2025 growth is forecast to be at the same pace as in 2023.
Namibia's economic growth rate is expected to decrease to 3.5% in 2024 before improving to 3.9% in 2025. The projected slowdown in 2024 is largely due to
the anticipated weaker global demand and slower growth in the primary industries, particularly the mining industry. GDP growth in 2025 will be underpinned by
rebounding of activities within the agriculture and mining sectors.
Customer spending is expected to remain contained with disposable income still under pressure from high interest rates and elevated inflation. We will continue
to support our clients through these challenging times, and transforming our client's experience remains our priority.
Looking ahead, we remain steadfast in fulfilling our purpose through our pursuit of innovation, excellence and customer satisfaction. We eagerly anticipate a
future marked by shared success, sustainable growth and creation of enduring value.
Appreciation
We express our deepest gratitude to the dedicated employees, loyal customers, supportive board of directors, committed shareholders, regulators, and all other
stakeholders for their unwavering support throughout the period. Their collective efforts have been instrumental in the continuing success of the group.
External review
The external auditors, PricewaterhouseCoopers did not review the condensed consolidated interim statement of financial position of SBN Holdings Limited as at
30 June 2024, and the related condensed consolidated interim statement of comprehensive income, condensed consolidated interim statement of changes in equity
and condensed consolidated interim statement of cash flows for the six months then ended, and selected explanatory notes.
SHORT FORM ANNOUNCEMENT
This short form announcement is the responsibility of the directors. It is only a summary of the information contained in the full announcement and does not
contain full or complete details.
The information in this announcement has been extracted from the unreviewed condensed interim financial statements, and the announcement itself is not
reviewed.
Any investment decision should be based on the full announcement and financial statements accessible from Thursday, 15 August 2024, via our website
at https://www.standardbank.com.na/ and via the NSX link https://senspdf.jse.co.za/documents/2024/nsx/isse/sno/ResJun2024.pdf
Copies of the full announcement are available for inspection at the group's registered office at no charge, weekdays during office hours.
By order of the Board
15 August 2024
BOARD OF DIRECTORS
IH Tjombonde (Chairman); E Tjipuka; S Hornung; STB Madonsela; AT Matenda; JS Mwatotele; JG Riedel; PL Schlebusch; NA Tjipitua.
REGISTERED OFFICE
1 Chasie Street, Kleine Kuppe, Windhoek; P.O. Box 3327, Windhoek, Namibia.
AUDITORS
PricewaterhouseCoopers, 344 Independence Avenue, Windhoek, Namibia.
DEBT SPONSOR
The Standard Bank of South Africa, 30 Baker Street, Rosebank, South Africa.
TRANSFER SECRETARIES
Transfer Secretaries (Pty) Ltd, 4 Robert Mugabe Avenue, P.O. Box 2401, Windhoek, Namibia.
Date: 15-08-2024 01:42:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
