First banking casualty of calamitous 2017 surfaces in pre-emptive trading statement
An innocuous trading statement released by First National Bank on Wednesday revealed to what extent Namibia’s biggest commercial bank has been affected by the most severe recession since Independence.
Released to both customers and shareholders by FNB sponsoring broker, IJG Securities, and published that same evening by the Namibian Stock Exchange News Service, the terse statement said “FNB Namibia Holdings Limited shareholders are advised that the group’s unaudited earnings for the six months ended 31 December 2017 are expected to be materially lower than the comparative period by between 10% to 15%.”
“Headline earnings and earnings per share for the period ended 31 December 2017 will be materially lower than the prior period by between 10% to 15%,” according to the NSX SENS.
Overnight response came from market analysts at PSG Namibia who had to adjust their own FNB outlook following this week’s announcement. While FNB still received glorious reviews in October last year from both IJG and PSG for its full-year results ended 30 June 2017, the tone has markedly changed in the latest assessment after release of the trading statement. PSG, in their Banking Review, also ranked FNB as the No.1 Namibian bank based on the previous year’s results.
In their earlier outlook, PSG still estimated FNB’s Headline Earnings per Share to grow by 1% for the financial year from 01 July 2017 to 30 June 2018 but on Thursday they retracted this statement, saying it was too optimistic in light of FNB’s own warning.
FNB’s unaudited interim financials for the semester from 01 July to 31 December 2017 will be released by the middle of February.
On the positive side, IJG Securities also announced on Thursday that Global Credit Ratings has affirmed FNB Namibia Ltd’s credit rating, stating “Global Credit Ratings has affirmed the national scale ratings assigned to First National Bank of Namibia Limited of AA+(NA) and A1+(NA) in the long term and short term respectively; with the outlook accorded as Stable. Furthermore, Global Credit Ratings has affirmed the long term South African national scale (Rand) issuer rating of AA-(ZA) assigned to First National Bank of Namibia Limited; with the outlook accorded as Stable.”