Standard Bank builds long-term

The year 2014 represented an opportunity for setting up enabling conditions for Standard Bank Namibia, according to end-of-year figures released by the company yesterday. After reporting that its operating conditions were under pressure due to a number of factors, the lender said it benefited from a strong focus throughout the year on foundational issues, expected to secure sustained growth and success from this year onwards. The results included a 23% increase in profit before tax, a 13% increase in profits after tax, and a 19% increase in loans and advances. Key challenges which affected the bank’s bottom line were a high cost base associated with the implementation of a new core banking system, and high levels of impairment by clients. The result was a N$134 million (15%) increase in expenses over the previous year, offset by a N$280 million (20%) increase in total income. In terms of revenue, net interest income increased by 29%, which according to the bank was mainly a result of growth in interest-earning assets, a good funding mix and higher achieved trading margins. The higher margins, the bank said, was due to a repricing of new business in the group’s mortgage, business and personal term lending books, done to “better reflect the risk and costs of anticipated regulatory changes, together with an increase in higher-margin unsecured lending.” Bad credit Increased transactional volumes resulted in a 23% increase in net fee and commission revenue, which in turn contributed to an 11% growth in overall non-interest revenue for Standard Bank Namibia Holdings. The bank said 2014 was a challenging year for it in terms of credit impairments, with high levels of instalment sale and finance leases, unsecured lending and card debtors struggling to keep up with payments. “However, decisive action to reduce the risk profile and the tightening of lending parameters has seen a softening of the impairments towards the end of 2014,” the Group says in an official statement on its annual performance. The main contributor to the increased operating costs were said to be staff, where costs grew by 8% over the year due to annual salary and other benefit increases. At December 31 2014, the group’s tier one capital stood at N$1 854 million, compared to the same date in 2013, when capital stood at N$1 771 million. WINDHOEK DENVER ISAACS