FirstRand Namibia declares 396.55 cents per share interim dividend
FirstRand Namibia’s interim financial results for the six months ended December 2022, show a financial services group that has solidly rebounded from the impact of Covid-19.
The group’s earnings increased by 36% to N$845 million, reflecting the quality of its main operating units, FNB and RMB.
Pre-provision profits grew 32% to N$1311 million from N$997 million, income from operations increased 21% to N$2388 million and the group produced N$396 million of economic profit, or net income after cost of capital (NIACC), which is one of the group’s key performance indicators.
FNB Namibia is still the behemoth in the stable, accounting for some 86% of total loans but on the deposit side, this ratio is more moderate. Here the commercial bank account for 48% of deposits received while RMB’s share is 21%, significantly higher than its contribution to the group’s loanbook.
FirstRand Namibia delivered strong revenue growth of 21%. The credit loss ratio decreased year on year to 26 bps and continued cost containment resulting in the headline earnings performance of 36% growth.
Upon release of the interim results, FirstRand Namibia stated that the six months to December 2022 saw more relief from the COVID19 related restrictions. Thus the prior year still had increased impairments and reduced volumes and hence the opening up to the increased performance for 2022.
As a result of that base effect, the group’s profit before tax increased with 37%. FirstRand Namibia has delivered a 8.2% compound annual growth rate (CAGR) in profit before tax since December 2019.
Net interest income increased 26% to N$1328 million from N$1051 million. Average interest-bearing assets increased by 7%, driven by average advances being up 6% vs PSCE of 4.2% in December 2022. Interest earned on advances grew with 33% whereas interest on investments also increased by 28%.
Deposits grew by 11% and totaled N$39 billion (2021: N$35 billion). Deposit holders earned N$551 million (2021: N$329 million) in interest across all deposit accounts for the period.
Interest paid to current account holders increased with more than 100% to N$72 million with interest paid on call deposits increasing to N$217 million from N$119 million in 2021.
The group posted a 14% reduction in the credit impairment charge to N$89 million (2021: N$103 million). This credit loss ratio reduced to 26 bps (2021: 30 bps) and was attributable to improved credit management over the loan portfolio, better-than-expected collection outcomes and a reduction in stage three loan impairments. The impairments included stage one and two impairments of N$1 million and specific impairment charges of N$101 million and recoveries of N$12 million.
Non-interest revenue (NIR) increased with 12%, to N$1120 million from N$998 million and accounted for 45% (2021: 48.7% ) of total revenue because net interest income grows faster with the hike in interest rates. Net fee and commission income grew 10% to N$981 million, representing 88% of total NIR.
The group gave notice of a total cash dividend of 396.55 cents per share for the six months ended 31 December 2022. This is made up of an interim ordinary share dividend of 209.70 cents and a special dividend of 186.85 cents, declared on 8 February 2023. The last day to trade shares on a cum dividend basis will be on 24 March 2023 and the first day to trade ex-dividend will be 27 March 2023. The record date will be 31 March 2023 and the payment date is 21 April 2023.
The group’s full report can be accessed here. FirstRand Interim Financials December 2022_opt