By:Justicia Shipena
Standard Bank Namibia Holdings Limited raised N$400 million in debt capital markets funding in 2022 through a green bond sale, said its outgoing Chief Executive Officer Mercia Geises.
The bank has released its annual report for 2022 in which it stated that the funds will be utilised to support renewable energy projects.
“The proceeds will be used to finance and refinance eligible renewable energy projects in Namibia,” Geises noted.
She said this is consistent with the Standard Bank Group Sustainable Bond Framework, which aligns with the SBG SEE impact areas of infrastructure, climate change, and sustainable finance, as well as the UN sustainable development goals.
At the same time, she highlighted that the bank’s PayPulse wallet platform, developed in collaboration with MobiPay, had been enhanced.
“Through our remittance partners, the transactional values on the platform have grown 20.8% and revenue increased by 17% year on year while our active customer base has increased by a remarkable 98.3%,” she said.
Geises went on to say that the bank had tremendous results, as indicated by a 35.5% increase in loans and advances in this category and a 79.5% increase in profit for the year.
Furthermore, she stated the bank improved its collections strategy and reduced credit impairment charges by 44.2%, lowering the credit loss ratio from 1.09 to 0.60 year on year.
This improvement, according to her, is due to the implementation of key strategic measures included in the company’s non-performing loan reduction strategy. She was happy with Standard Bank’s progress, which included a 70.5% increase in earnings for the year.
“I believe that this is testament to our sound governance, prudent yet bold management, a resilient business that is well positioned for growth and supported by a strong balance sheet,” she stressed.
Standard Bank Namibia net interest income climbed by 17.5% to N$1 445 million, according to its 2022 annual report.
This was mostly owing to the consistent 300 basis point increase in the repo rate from 3.75% to 6.75% from January 1, 2022, as well as the continued improvement in the net interest margin, which increased from 3.9% to 4.4%.
The report said interest income was up 22.4%, driven by the increase in interest rates and focused growth in loans and advances in CIB.
Meanwhile, interest expense increased by 30.6% as a result of the additional N$400 million green bond issuance, as well as the bank’s ongoing focused approach to shifting the composition of its deposits and advances book to attract more term and notice deposits.
Non-interest revenue increased by 6.1% to N$1 283 million, driven by a 31.8% increase in trading revenue due to increased client flows and currency market volatility.
In addition, other revenue increased 37.1% from N$106 million to N$146 million, driven by a N$23 million increase in bancassurance revenue and an additional N$26 million in property-related revenue from the Spearmint property portfolio acquisition.
According to the report, the bank’s credit impairments reduced by 44.2% year on year, owing principally to the continuous implementation of its 2021 non-performing loan reduction strategy and the accomplishment of related strategic initiatives.
“As a result, our credit loss ratio (CLR) reduced by 49bps from 1.09% to 0.60%. This will continue to be a focus area for the group,” the report stated.
Operating expenses increased by 5.8% to N$1.7 billion, falling short of the 6.1% annual inflation rate.
The bank also reported a 3.1% decrease in staff costs, owing mostly to the non-recurrence of expenses related to the voluntary separation package taken by eligible employees in 2021.
Other operational expenditures increased by 15.8%, mostly due to increases in IT expenses, professional fees, and amortisation costs to support client growth goals.
“The group ensures that there is ongoing robust management and monitoring of the cost containment measures in place to meet its cost-to-income target of below 60%,” said the report.