Bank turning a handsome profit

BANK Windhoek announced its financial results for the 2009 /2010 financial year which ended on 30 June 2010.

“From our humble beginnings in 1982, Bank Windhoek has been on a steady growth path and succeeded year on year to surpass shareholder’s expectations in a very competitive environment. Today, Bank Windhoek is the second largest bank in Namibia with total assets of N$14 billion as at 30 June 2010. With the extension of our footprint in the financial year to Rehoboth, Oshikango, Prosperita (Windhoek) and /Ai-Gams (Windhoek) we are proud to now have the largest retail branch and ATM network in Namibia,” said James Hill, Managing Director.

Bank Windhoek is pleased to announce that the Group delivered favourable net profit after tax earnings of N$247.4 million for the financial year ended on 30 June 2010, an increase of 18% over the previous year.

As a result of the financial crisis, interest rates reduced rapidly during the previous financial year. Wholesale funding rates reduced during the period under review and furthermore long-term fixed rate funding, required for liquidity purposes in the previous period, matured and was re-deposited at current market rates.

The net result of this was that the Bank increased its net interest income by 14%. The market took a keen interest in the Group’s Negotiable Certificate of Deposits, resulting in an increase of N$2 billion in this particular funding product.

As part of the recovery and rehabilitation process after the global recession, there has been a concerted effort by Bank Windhoek to focus on the quality of loans and advances. As a result of this, the impairment charge through the income statement has been contained at 0.2% of gross loans and advances, which is an exceptional performance measured by any standards.

The Group’s total assets grew by 16%, which is underpinned by the growth in gross loans and advances of 16% as well as increasing market share to over 30%. The recovery of the Namibian economy is apparent in the increase of gross mortgage loans which grew by 26% over the previous year.

Irrespective of this growth in loans and advances, the quality of its advance book remains the Group’s primary objective and an underlying principle when granting new facilities. Non-interest income was significantly impacted by the introduction of Bank Windhoek’s own Point-of-Sale devices, the implementation of which exceeded expectations.

Operating expenses increased by 15%, which was mainly due to staff costs. This investment in human capital is aligned with the Group’s strategy to ensure that the right people are employed and retained. With the implementation of Basel II, the requirement to hold capital for operational and market risk was expected to negatively impact the risk-based capital ratios.

The impact was however not significant. The total risk-based capital ratio decreased from 13.6% in the previous year to 12.6% in the current year, still above the required statutory levels.

“The 2009/2010 financial year was characterized by many highlights for the Bank. The launch of our service Charter is tacit proof of our commitment to offer quality service to our clients, through our service values of friendliness, helpfulness, empathy, professionalism, competency and efficiency.

“Our strong focus on the entrenchment of our Service Charter inside the organisation will remain a key strategic objective, as we believe that in a competitive environment like banking, it is often the level of service quality that differentiates us from the rest.

“The establishment and launch of Bank Windhoek’s new 24 hour Customer Contact Centre in June 2010 will further enhance our ability to improve our service to clients,” Mr Hill concluded.