Standard Bank reigns in costs, profit hits N$1 billion mark
Standard Bank Namibia has been able to contain its credit impairments, signalling that its cost containment strategy has started to bear fruit, and helped the bank hit the N$1 billion mark for the first time in its existence.
It follows the release of its financial results for the year ended 31 December 2024.
Credit impairments fell by 35.1% year-on-year, driving the credit loss ratio down to 0.37% from 0.59% in the previous period, the lender said.
“The credit loss ratio (CLR) decreased to 0.37% compared to 0.59% in the prior year. The CLR improved due to the decrease in credit impairment charges and the growth in loans and advances. The group is prudent in its provisioning and closely monitors and reassesses its strategic NPL initiatives to ensure they are fit for purpose,” Standard Bank said.
Standard Bank managed to reduce operating expense growth to 6.9%, closer to inflation, from 10.8% the previous year.
“Operating expenses growth decreased by 10.8% from prior year to 6.9% which tracked closer to the average inflation for the year of 4.3%. Staff costs which went up by 10.2%, underpinned by annual salary increases of 7% , filling of vacant positions and the engagement of temporary IT employees to support key regulatory projects such as National Payment System (PSD-9),”
Other operating expenses grew by 4.5%, which is in line with average annual inflation of 4.3%. The group’s cost-to-income (CTI) ratio has decreased to 56% from 61% in 2024, the lender said.
The lender was also able to decrease its non-performing (NPL) ratio to 3.77%, despite what it noted was a high interest rate environment during the course of 2024
“Despite the difficult macroeconomic environment characterised by prolonged high interest rates, sticky and elevated inflation, our NPL ratio (including interest in suspense) decreased from 4.52% (restated) in 2024 to 3.77% which is below both the industry average of 5.6% as at 31 December 2024 and the regulatory trigger limit of 6%.
“The decline in the NPL ratio demonstrates our disciplined and prudent approach to credit risk management and is testament to the resilience of our NPL reduction plan. The group remains committed to closely monitoring NPLs to ensure a good quality book,” according to Standard Bank.
On the revenue side, the bank was able to record a N$283 million climb in profit, enabling it to cross the billion-dollar mark.
“The group’s profitability reached a record high in 2024, with profit for the year increasing significantly to N$1 053 billion, a substantial improvement from N$770 million in 2023,” Standard Bank said.
“Net interest income surged to N$2.067 billion, a 14.8% increase from prior year, while net-interest margin increased by 40 basis points to 5.6% in the current year, while non-interest revenue increased by 15.3% to N$1.678 billion from the previous year, underscored by increases in: net fee and commission revenue of 9%, trading revenue of 11.7%, other revenue of 31.7% and other gains and losses on financial instruments of 46.8%,” it added.
It follows the release of its financial results for the year ended 31 December 2024.
Credit impairments fell by 35.1% year-on-year, driving the credit loss ratio down to 0.37% from 0.59% in the previous period, the lender said.
“The credit loss ratio (CLR) decreased to 0.37% compared to 0.59% in the prior year. The CLR improved due to the decrease in credit impairment charges and the growth in loans and advances. The group is prudent in its provisioning and closely monitors and reassesses its strategic NPL initiatives to ensure they are fit for purpose,” Standard Bank said.
Standard Bank managed to reduce operating expense growth to 6.9%, closer to inflation, from 10.8% the previous year.
“Operating expenses growth decreased by 10.8% from prior year to 6.9% which tracked closer to the average inflation for the year of 4.3%. Staff costs which went up by 10.2%, underpinned by annual salary increases of 7% , filling of vacant positions and the engagement of temporary IT employees to support key regulatory projects such as National Payment System (PSD-9),”
Other operating expenses grew by 4.5%, which is in line with average annual inflation of 4.3%. The group’s cost-to-income (CTI) ratio has decreased to 56% from 61% in 2024, the lender said.
The lender was also able to decrease its non-performing (NPL) ratio to 3.77%, despite what it noted was a high interest rate environment during the course of 2024
“Despite the difficult macroeconomic environment characterised by prolonged high interest rates, sticky and elevated inflation, our NPL ratio (including interest in suspense) decreased from 4.52% (restated) in 2024 to 3.77% which is below both the industry average of 5.6% as at 31 December 2024 and the regulatory trigger limit of 6%.
“The decline in the NPL ratio demonstrates our disciplined and prudent approach to credit risk management and is testament to the resilience of our NPL reduction plan. The group remains committed to closely monitoring NPLs to ensure a good quality book,” according to Standard Bank.
On the revenue side, the bank was able to record a N$283 million climb in profit, enabling it to cross the billion-dollar mark.
“The group’s profitability reached a record high in 2024, with profit for the year increasing significantly to N$1 053 billion, a substantial improvement from N$770 million in 2023,” Standard Bank said.
“Net interest income surged to N$2.067 billion, a 14.8% increase from prior year, while net-interest margin increased by 40 basis points to 5.6% in the current year, while non-interest revenue increased by 15.3% to N$1.678 billion from the previous year, underscored by increases in: net fee and commission revenue of 9%, trading revenue of 11.7%, other revenue of 31.7% and other gains and losses on financial instruments of 46.8%,” it added.
