FirstRand profits increase to N$552.7 million amid tough economic climate
FirstRand Namibia’s financial results for the period ended 31 December 2018 demonstrates subdued performance given the difficult local economic climate, with profit after tax increasing by 5.2% to N$552.7 million
Oscar Capelao, FirstRand Namibia Chief Financial Officer said that the impact of the challenging economic climate was certainly felt in the financial services sector.
“The local economy had to endure the main elements that detract from economic growth, namely high unemployment, harsh environmental conditions, increasing inflation, low commodity prices and lower investor confidence,” Capelao added.
The half year results further show that the group’s net interest income grew by 10.5% to N$ 1 001.1 million (2017: N$ 906.2 million) on the back of steady deposits and advances growth. The pressure on margins remained constant when compared to the same period a year ago, demonstrating the greater need for conscious effort to take risk into consideration when pricing the group’s portfolios.
The group operating costs have increased by 6.9% to N$ 1 020.1 million (2017: N$ 954.0 million), while total assets increased by 8% to N$ 42.1 billion (2017: N$ 39.0 billion).
All in all, IJG Research noted that these results do not paint a rosy picture of the state of the Namibian economy, but slightly exceeded expectations.
“Despite the challenges, the bank seems to have contained costs and managed its cost of funding well. The subdued demand for credit, especially from individuals, is symptomatic of the prolonged recession, which has lasted much longer than initially expected,” IJG added.