Nedbank Namibia losses N$ 212.7 million in profit

PHILLEPUS UUSIKU Nedbank Namibia lost about N$ 212.7 million in profit after tax for the year ended 31 December 2020, registering a negative growth of 64.37% to N$117.1 million, when compared to N$ 330.4 million recorded the previous year, according to the bank’s annual financial statements.Similarly, net interest income and impairments were negatively affected as a result of the reduction in the repo rate to make borrowing attractive.N$116.7 million was lost in net interest income, registering a negative growth of 13.6% to N$740.4 million, compared to N$857.1 million recorded the previous year.Impairments of advances increased by N$137.5 million, an increase of 126.3% to N$ 246.5 million from N$108.9 million registered the previous year. According to Martha Murorua, Managing Director at Nedbank Namibia, the significant increase in impairments is due to the widespread effect of the Namibia economy in recession, impacting the ability of consumers and businesses to repay existing debt.Also, contributing to the increase in impairments is the weak outlook for the Namibian economy for the foreseeable future, compounded by the Covid-19 pandemic, extending the expected economic recovery to beyond what was initially projected in 2019.The slow economy and the outbreak of Covid-19 have impacted the banking industry negatively as 2020 represented lower level of consumer appetite for credit, particularly for home loans and vehicle financing.Murorua notes that the lower demand for credit by consumers is in line with the decline in private sector credit extension. Nedbank’s gross loans and advances grew by 2.58% to N$12.7 billion, when compared to N$12.4 billion recorded in the previous period.Weak growth in loans and advances remain a challenge due to the persistent unfavourable economic environment.RELIEFA total of 1564 Nedbank clients requested for repayment holiday, restructuring and overdraft assistance, amounting to N$2.1 billion to ease the burden on clients created by the Covid-19 pandemic.In addition, Nedbank contributed a total amount of N$2.5 million on Covid-19 Corporate Social Investment (CSI) projects, while N$7.7 million was spent on spent on personal protective equipment and staff support, Murorua pointed out.Furthermore, due the 275-basis point cut in the repo rate leading to a historic low rate of 3.75%, Nedbank’s net interest income decreased by 13.61% to N$740.4 million. This implies that the bank was unable to generate sufficient income through interest payment because the cost borrowing was low.OUTLOOK Murorua notes that the chances of a double-dip global recession have, however, been reduced by adjustments to the new ways of working, while the rollout of vaccines has increased the likelihood of a stronger recovery as economic activity normalises. The pace of rebound will depend on the efficacy of the vaccines and the speed of the rollout.The Namibian growth outlook has been boosted by the global recovery and firmer commodity prices. Although the domestic environment remains fragile, favourable rainfall is supporting the revival of agricultural output, despite some parts of the country being impacted by flooding.Power shortages continue to constrain industrial activity, while the weak state of government finances will inhibit its capacity to boost its spending significantly.Overall, the Namibian economy is expected to recover during 2021, snapping the severe downturn that started in 2016. The Bank of Namibia’s Monetary Policy Committee (MPC) is expected to maintain its repo rate at 3.75% throughout the year, in line with Nedbank’s expectation of a flat repo rate in South Africa, she pointed out.

Nedbank Namibia losses N$ 212.7 million in profit

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Republikein 2025-08-06

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Nedbank Namibia losses N$ 212.7 million in profit

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