Bank Windhoek profit up over 25%
Bank Windhoek’s executives are beaming with much delight following the release of an impressive set of financial results for the year ended 30 June 2014.
To the delight of shareholders, the commercial bank reported that its operating profit for the just concluded year has grown by 26.7%. The group reported that profit exceeded the forecast June 2014 profit after tax, with the results largely underpinned by good revenue growth, prudent expense management and effective credit management, according to a statement issued by Bank Windhoek Holdings. The bank is holding a presentation this Friday morning at the Safari Court Hotel and Conference Centre to highlight the individual components of its sterling performance.
Headline earnings increased by 22.5% to N$606 million while total comprehensive income increased by 24% to N$639.2 million. Shareholders are in for a treat following a dividend per share increment of 34.4% and a return on average equity of 21.9%. Net interest income surpassed the billion dollar mark, obtaining a year on year increase of 15.6% to equal N$1 billion, supported in turn by a growth in average interest-earning assets of 16.2% Bank Windhoek Holdings reported.
Ahead of releasing the results, Bank Windhoek Holdings anticipated a profit after tax growth in the range of 24% to 29%, growth in basic earnings per share expected to lie in the range 12% to 17% while growth in headline earnings per share were expected to to slot in comfortably between 8% and 13%.
The surge in non-interest income was according to Bank Windhoek Holdings driven primarily by a constant focus on customer service which subsequently resulted in increased business volumes, with a growth in the number of accounts and substantial increases in transactions through electronic banking channels witnessed for the year under review.
The group further improved its efficiency and diversification ratio with non-interest income contributing 39.8% of the group operating income and covering 74.3% of the group´s operating expenses for the year under review.
Income received from associates equated to 13.5% of total income received, underpinned by strong results driven by Santam and Sanlam to the value of N$84.3 million. A sharp spike in operating expenses approximately 20% higher than in 2013 was recorded for the financial year, 16% made up of expenses by subsidiaries excluding newly acquired Capricorn Asset Management and Capricorn Unit Trust Company. Investments in information technology and capacity building initiatives were the holding company’s main cost drivers. Despite the swell in operating costs, Bank Windhoek Holdings reported an improved income ratio of 53.6% for the period under review. An effective credit management regime has resulted in the loan loss rate decreasing 0.15%, maintaining the bank’s customary low bad debt levels while non-performing loans as a percentage of gross advances decreased to 0.68% from just under one percent.
Loans and advances grew 14.7% to approximate N$20.2 billion while the bank’s loan loss rate equated 0.15% over a five year period while its annual compounded growth rate of gross loans and advances grew 15.5%, Bank Windhoek Holdings said.