| Wed 11 Sep 2002, 0:00 | | NSX - FIRST NATIONAL BANK OF NAMIBIA LIMITED |
|
NSX - FIRST NATIONAL BANK OF NAMIBIA LIMITED
Registration No. 88/024
Share code: FNB
ISIN Code: NA0009176422
http://www.fnbnamibia.com.na
AUDITED GROUP RESULTS FOR THE YEAR ENDED 30 JUNE 2002
BALANCE SHEET
N$ Million 2002 2001 % change
ASSETS
Cash and short-term funds 703,2 305,4 130,3
Investment securities 276,7 222,6 24,3
Advances 2 932,2 2 632,7 11,4
Current assets 98 ,7 58,0 70,2
Interest in subsidiary
companies
Property and equipment 59,3 55,5 6,8
Deferred taxation 1,6 2,1 (23,8)
4 071,7 3 276,3 24,3
LIABILITIES AND SHAREHOLDERS` FUNDS
LIABILITIES
Deposits and current accounts 3 270,8 2 627,6 24,5
Creditors and accruals 135,3 64,5 109,8
Provision 20,7 20,4 1,5
Deferred taxation 50,5 41,7 21,1
Total liabilities 3 477,3 2 754,2 26,3
SHAREHOLDERS` FUNDS
Share capital 1,0 1,0
Reserves 593,4 521,1 13,9
Total shareholders` funds 594,4 522,1 13,9
4 071,7 3 276,3 24,3
Contingencies and commitments 159,1 168,9 (5,8)
INCOME STATEMENT
N$ Million 2002 2001 % change
Interest income 471,5 419,5 12,4
Interest expenditure (201,9) (173,8) (16,2)
Net interest income 269,6 245,7 9,7
General bad debt provision (2,4) (4,4) 45,5
Specific bad debt provisions (2,7) 1,1 -
264,5 242,4 9,1
Other operating income 158,4 131,3 20,6
422,9 373,7 13,2
Other operating expenditure (188,2) (176,2) 6,8
Profit before taxation 234,7 197,5 18,8
Taxation (78,4) (65,4) (19,9)
Net profit 156,3 132,1 18,3
Earnings per share (cents) 78,1 66,0 18,3
Dividends per share (cents) 42,0 25,5 64,7
CASH FLOW STATEMENT
N$ Million 2002 2001
Cash flows from operating
activities
Cash generated by 251,3 214,8
operations
Dividends paid (84,0) (51,0)
Taxation paid (62,1) (65,9)
Net cash flows from operating activities 105,2 97,9
Cash flows from investment (14,6) (4,2)
activities
Cash flows from banking 307,2 (104,3)
activities
Net increase/(decrease) in
cash and cash equivalents 397,8 (10,6)
Cash and cash equivalents
at beginning of the year 305,4 316,0
Cash and cash equivalents
at end of the year 703,2 305,4
STATEMENT OF CHANGES IN EQUITY
Share Share Retained Total
N$ Million capital premium profits equity
Balance at 1 July 2000:
As previously reported 1,0 11,0 403,1 415,1
Effect of change in 25,9 25,9
accounting policies
As restated 1,0 11,0 429,0 441,0
Dividend (51,0) (51,0)
Net profit 132,1 132,1
Balance at 30 June 2001 1,0 11,0 510,1 522,1
Balance at 1 July 2001 1,0 11,0 510,1 522,1
Dividend (84,0) (84,0)
Net profit 156,3 156,3
Balance at 30 June 2002 1,0 11,0 582,4 594,4
FEATURES OF THE GROUP RESULTS
2002 2001 % change
Share performance
Earnings per share (cents) 78,1 66,0 18,3
Dividends per share (cents) - ordinary 42,0 25,5 64,7
Share price (cents) - ordinary 395 336 17,6
Number of shares in issue (000`s) - 200 000 200 000
ordinary
Dividend cover (times) 1,9 2,6 26,9
Return on shareholders` equity (%) 26,3 25,3 3,9
Net asset value per share (cents) 297,2 261,1 13,8
Dividend yield (%) - ordinary shares 10,6 7,6 39,5
Earnings yield (%) - ordinary shares 19,8 19,7 0,5
Price: Earnings ratio - ordinary 5,1 5,1
shares
Selected ratios
Return on total year-end assets (%) 3,8 4,0 (5,0)
Cost to income ratio (%) 44,0 46,7 5,8
Bad debt charge / (release) as a % of
average advances (%) 0,2 0,1 100,0
Other operating income as a % of total
income (%) 37,0 34,8 6,3
Capital adequacy ratio
Tier 1 (%) 23,23 23,40
Tier 1 & 2 (%) 24,39 24,61
REVIEW OF OUR FINANCIAL RESULTS
Highlights of our performance and dividend announcement
First National Bank of Namibia takes pleasure to report strong second
half earnings growth of 27,5 per cent compared to the corresponding
period last year. This has resulted in an increase in earnings for the
full year of 18,3 per cent to 78,1 cents per share (2001 : 66,0 cents).
With good earnings growth in all major areas of our business, this
performance is significant when considering difficult global conditions,
limited GDP growth, a competitive banking industry, increasing interest
rates, inflationary pressures and a highly volatile exchange rate.
Despite the above aspects and the release of challenging results, the
directors have nevertheless declared a dividend that shows even stronger
growth, clearly demonstrating our confidence in the future of business
in Namibia. The bank has declared a final dividend of 25 cents a share
in respect of the year ended 30 June 2002, thereby increasing its annual
dividend by 39 per cent to 46 cents per share (2001 : 33 cents).
This equates to a dividend cover of 1,7 times, once again an improvement
on 2001, when the dividend was covered 2,0 times. The annual dividend
of 46 cents a share represents a dividend yield at current prices of
11,5 per cent.
Commentary on results
As anticipated in our interim results` commentary, First National Bank
of Namibia produced stronger earnings growth in the second half of the
year under review, as illustrated in the following table:
N$ million 2002 2001 Growth
1st 6 months 72,4 66,3 9,2%
2nd 6 months 83,9 65,8 27,5%
Full year 156,3 132,1 18,3%
The acceleration of earnings in the second half of the year can be
attributed to all aspects of our business.
Compared to the first six months of this year, interest turn is up N$ 19
million (16 per cent), non-interest income is up N$ 6,5million (8,6 per
cent) with the bad and doubtful debt charge maintained at the same
level. Non-interest expenditure, excluding staff costs, only increased
marginally.
Income statement
Despite a modest first half, headline earnings for the year increased by
18,3 percent from N$ 132,1 million to N$ 156,3 million. Net interest
income increased by 9,7 per cent to N$ 269,5 million. Viewed against
the overall growth in average advances of 17 per cent for the year, the
squeeze in margins as a result of the competitive environment is
evident.
The charge for specific bad debt provisions at N$ 2,7 million,
contrasted by a net release of N$ 1,1 million the previous year, is
still very low against the most prudent banking norms.
Other operating income increased by 20,7 per cent to N$ 158,4 million
(2001 : N$ 131,3million) and contributed 37 per cent of total income
(2001 : 34,8 per cent).
Our strategic objective of further improving efficiencies is illustrated
by other operating expenditure once again being extremely well contained
and the year on year increase of 7 per cent is well below Namibia`s
inflation rate of 10,5 per cent. This has culminated in a cost-to-
income ratio of 44,0 per cent, down from 46,7 per cent recorded in the
previous year. The bank clearly set the pace for the local industry with
this ratio, and this compares favourably with the international norm of
around 50 per cent.
Balance sheet
The bank`s new customer-focused units were fully operational for the
year under review and their success already manifested in the results
for the period. First National Bank of Namibia developed marketing and
sales strategies by assessing the needs of the corporate, commercial and
retail market segments. These strategies, which emphasise quality asset
growth combined with sound credit principles, resulted in the retention
of our customer base with sound financial discipline.
The bank aggressively targeted the corporate market and consequently
gained significant corporate customers. Total advances grew by 11,4
percent to N$ 2 932,1 million, on a year on year basis. Significant,
however, is that the total average advances were some 17 per cent higher
than the averages for 2001.
Total assets grew by 24,7 percent to N$ 4 071,7 million, bolstered by
deposits from large corporates, due to our significant capital base.
Focus on quality assets established a solid base for future earnings.
Non performing assets as a percentage of total advances now stands at
3,8 per cent compared to 6,2 per cent in 2001 and 9,8 per cent for the
year before. Similarly, specific provisions held against the total
lending book show a similar trend, currently at 1,3 per cent compared to
2,2 per cent for 2001 and 3,9 per cent for 2000.
Corporate Governance
The directors have satisfied themselves that locally recognised
principles of corporate governance were applied throughout the year
under review. The board further takes cognizance of the King II Report
on corporate governance. The board will be reviewing the report and
implementing any procedures and policies to support the code in the next
financial year, where it does not already comply.
Accounting Policies
These financial statements for the year under review have been prepared
using accounting policies consistent with those of the annual financial
statements for the year ended 30 June 2001, except for the adoption of
the following:
Events after the balance sheet date (AC 107). In terms of this
statement, dividends proposed or declared after the balance sheet date
are not recognised as a liability at the balance sheet date but only on
the date of declaration. This change in recognition of liabilities
relating to dividends has been applied retrospectively.
Employee benefits (AC116). Previously liabilities in respect of
accumulated leave benefits were calculated on basic salaries only. The
policy has now been adopted to take into consideration the full cost of
the employee to the bank.
Comparative amounts have been restated, with no material effect on the
financial performance ratios of the bank.
Prospects
We remain concerned regarding lower levels of economic growth, volatile
currency markets and the contagion effect of the uncertain economic
environment in the United States.
However, with a sound advances book, continued strategic alliances and
improved efficiencies from technological applications, current momentum
should continue into the next financial year. We will actively continue
to pursue opportunities to deploy our excess capital into new business
challenges.
Events subsequent to balance sheet date
A cautionary announcement will be issued on 05 September 2002 as First
National Bank of Namibia and Swabou Holdings Limited have entered into
discussions regarding a potential merger, and the respective
shareholders of First National Bank of Namibia and Swabou Holdings
Limited will therefore be advised to exercise caution in dealing in the
securities of First National Bank of Namibia and Swabou Holdings Limited
until a further announcement is made in this regard.
H-D. Voigts S.H. Moir
Chairman Managing Director
Windhoek, 4 September 2002
By order of the board
F J Thirion Windhoek,4 September 2002
Company Secretary
Directors: H-D. Voigts (Chairman), S.H. Moir (Managing Director), V.W.
Bartlett, H.W.P. Bttger,
E.P. Shiimi, A.G. Wellsted, I.I. Zaamwani (Ms)
Registered Office: First National Bank Building, 209 Independence
Avenue, P O Box 195, Windhoek, Namibia
Transfer Secretaries: Transfer Secretaries (Proprietary) Limited
(Registration number 93/713),
Shop 12, Kaiserkrone Centre, Post Street Mall, P O Box 2401, Windhoek,
Namibia
Date: 11/09/2002 05:35:37 PM Produced by the JSE SENS Department
