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Financial Sector Strategy sets ten-year targets

CEO of FNB, Ian Leyenaar shared his views on the Financial Sector Strategy launched in August.

CEO of FNB, Ian Leyenaar shared his views on the Financial Sector Strategy launched in August.

The recently launched ten- year Financial Sector Strategy has renewed pressure on the local banking sector to reduce its level of foreign ownership. Out of the four commercial banks currently operating in the country, only Bank Windhoek is locally owned while the other three banks are majority owned by their parent companies in South Africa.
However, FNB Namibia says the onus is on its competitors to satisfy the goals of the Financial Sector Strategy whose aim is to have financial institutions, including banks, majority owned by locals.
Chief Executive Officer Ian Leyenaar says the fact that the bank is listed on the Namibia Stock Exchange (NSX) and is 42% owned by local investors should count in its favour in satisfying the yet-to-be-announced bank ownership threshold.
He said: We are still discussing with the regulator as you know they launched the Financial Sector Strategy only a few weeks ago.
“Currently our shareholding is roughly 58% foreign owned and 42% local while two of our competitors remain fully owned from South Africa so I think the challenge is more on their side than our side.”
FNB Namibia is the only bank listed on the local bourse.
Leyenaar says if Barclays conclude the deal in which the British bank wants to acquire a 49.9% shareholding in Bank Windhoek that will bring in “interesting dynamics” to the banking industry.
Although there has been no directive yet on the foreign shareholding thresholds, it is envisaged that at the end of the Financial Sector Strategy in 2021, banking institutions will be majority owned by locals and will also be listed on the NSX.
According to the Financial Sector Strategy document, the Namibian financial services sector has been historically dominated by foreign ownership, a situation that needs to be reviewed.
“Most of the financial service providers operating in the country are majority owned by South African parent companies, with no or very little local ownership. There is a need to have a mix of  locally owned and foreign owned institutions so as to ensure the developmental needs of the country are addressed” said Minister of Finance, Hon. Saara Kuugongelwa at the launch ceremony.
“The sector is further characterised by low numbers of indigenous/previously disadvantaged Namibians in management positions. This phenomenon has been in the past attributed to low skill levels among previously disadvantaged Namibians.
“In order to address this deficit, there is a need to implement human resource development programmes so as to ensure that there is a strong pool of Namibians with the requisite skills to work in the financial sector.”

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