FirstRand Namibia: N$2.15bn Profit Driven by Corporate Lending

• FirstRand Namibia reported a N$2.15 billion net profit for the year ended June, an increase from N$1.91 billion in the prior financial year.
• The profit was significantly boosted by a 35.0% surge in corporate lending, which now accounts for N$11.0 billion of the bank's total loan portfolio.
• The group's credit loss ratio improved to 0.6%, while non-performing loans remained below the industry average at 3.8%.
• FirstRand Namibia allocated N$658 million to upgrading information technology systems and warned of rising fraud attempts and online scams.
• Shareholders received 668.34 cents per share in dividends, marking a 40.3% increase from the previous year.

The group's robust financial health was underpinned by a significant expansion in corporate lending, which saw its loan book grow by 35.0% to N$11.0 billion, now constituting a quarter of all bank loans.

FirstRand Namibia, the parent company of FNB Namibia and RMB Namibia, announced a net profit of N$2.15 billion for the financial year concluding in June. This represents a notable increase from the N$1.91 billion reported in the preceding financial year, underscoring a period of significant growth for the banking group. The institution's profit before tax climbed by 12.7% to N$3.01 billion, while its return on equity remained robust at 28.5%.

During this period, FirstRand Namibia distributed N$555 million in dividends to its shareholders, while simultaneously enabling customers to earn N$2 billion in interest on their savings and investments. The group also reported headline earnings of N$2.1 billion and managed customer deposits totaling N$52.1 billion. The majority of FirstRand Namibia's ownership is held by Namibian institutions and investors, reflecting a strong local presence.

Otto Shikongo, the chairperson of FirstRand Namibia, commented on the institution's ability to expand despite global uncertainties, highlighting a sound financial performance against a backdrop of domestic economic resilience. This positive outlook was further supported by Chief Financial Officer Lizette Smit, who attributed the strong financial results to a resilient customer base, disciplined balance sheet growth, prudent risk management, and continuous investment in operational capabilities.

The substantial N$2.15 billion profit was primarily propelled by two key factors: a significant increase in corporate lending and a reduction in provisions for bad debts. FirstRand Namibia's total income reached N$6.18 billion, derived from two main revenue streams. Interest generated from loans constituted 57% of this income, rising by 9.4% to N$3.67 billion from N$3.36 billion in the 2025 financial year, after accounting for interest paid on savings accounts.

The remaining 43% of the total income came from bank fees and services, which saw a 2.8% increase to N$2.77 billion, up from N$2.70 billion in 2025. This growth in fee-based income occurred despite the bank's decision to eliminate fees on local debit card swipes and reduce charges for common transactions such as CashPlus and internal money transfers, demonstrating the strength of its diversified income model.

FirstRand Namibia's overall lending portfolio, or gross advances, expanded by 9.2% to N$42.81 billion, an increase from N$39.22 billion in 2025. A significant portion of this growth was attributed to corporate lending, with the large corporates loan book surging by 35.0% to N$11.0 billion, up from N$8.1 billion in 2025. This expansion means that corporate lending now constitutes 25% of all bank loans, a rise from 20% in the previous year.

Lending to individuals also saw an increase of 3.0% to N$24.3 billion, compared to N$23.6 billion in 2025. Home loans, while still a major component, decreased slightly to 44% of the bank's total loans from 46% in 2025. Conversely, lending to local businesses experienced a minor reduction, settling at N$8.9 billion from N$9.0 billion in 2025.

The group's robust financial health was underpinned by a significant expansion in corporate lending, which saw its loan book grow by 35.0% to N$11.0 billion, now constituting a quarter of all bank loans. This growth was complemented by strong risk management, as evidenced by a reduction in the credit loss ratio to 0.6% from 1.3% a year prior. Non-performing loans remained stable at 3.8%, which is below the banking industry average of 4.2%. Provisions set aside for bad loans were significantly reduced by 52.8% to N$249 million, down from N$527 million in 2025. Chief Executive Conrad Dempsey emphasized that disciplined risk management is crucial for protecting shareholder value, maintaining financial system stability, and ensuring the capacity to support customers through various economic cycles.

Operating the bank incurred N$3.12 billion in costs during the year, an 11.5% increase from N$2.80 billion in 2025. A substantial portion of this, N$1.8 billion, was allocated to its 2,486 employees, representing a 10.8% rise from N$1.6 billion in 2025. Furthermore, N$658 million was invested in upgrading information technology systems and digital banking tools, an increase from N$553 million in 2025, reflecting a commitment to technological advancement.

FirstRand Namibia contributed N$1.8 billion in direct and indirect taxes to the state fiscus. Ordinary shareholders received 668.34 cents per share, marking a substantial 40.3% jump compared to 476.34 cents per share in 2025. The bank also demonstrated its commitment to social responsibility by donating N$19.1 million to community projects through the FirstRand Namibia Foundation, an increase from N$17.2 million in 2025. Additionally, 87% of its procurement spending was directed towards local suppliers within Namibia.

Despite the strong financial performance, the report highlighted several potential risks. A key concern identified was the continued rise in fraud attempts and online scams, posing a significant challenge for both the bank and its clientele.

This report indicates significant growth in corporate lending by a major Namibian financial institution, suggesting increased activity in corporate finance and potential legal work related to loan agreements, security, and transaction advisory. The explicit mention of rising fraud and online scams also flags a critical compliance and risk management area for financial institutions and their corporate clients, necessitating robust legal and security frameworks.

Source: Original reporting via The Namibian