Second bank plans listing on NSX

Windhoek – Bank Windhoek, one of Namibia’s biggest banks, plans to list on the Namibia Stock Exchange (NSX).
The bank’s mother company, Capricorn Investment Holdings, had been a subject of a takeover bid from Barclays PLC of Britain until the deal collapsed last year.
With the collapse of the deal, it seems Bank Windhoek now wants to attract new investors through listing on Windhoek-based the stock exchange.
Bank Windhoek is the only 100 percent Namibian owned of the four major banks in the country.
The others First National Bank (FNB) Namibia, Standard Bank and Nedbank have South African shareholding.
Bank Windhoek chairman, Koos Brandt, confirmed that the bank has applied to the Namibian Stock Exchange (NSX) for the listing of its shares on the main board of the bourse.
Brandt did to say when the bank plans to list.
If it gets approval to list, Bank Windhoek will become the second banking group to list on the NSX after FNB Namibia Holdings.
In November last year, Capricorn ended talks with Barclays PLC over buying a stake in the Namibian financial group.
This was despite an announcement earlier in June by the Bank of Namibia that it had given conditional approval for Barclays PLC to pursue the potential acquisition of a controlling stake in Bank Windhoek Limited through Capricorn Investment Holdings Limited (CIH).
But the talks between Barclays and Capricorn ended after Barclays subsequently advised Capricorn that it would not be in a position to pursue the transaction until the proposed combination of the majority of its African businesses with its South Africa subsidiary ABSA Bank is further progressed.
In the 1980’s Barclays disinvested from Namibia, then occupied by apartheid South Africa as part of economic sanctions against the then apartheid regime.
Bank Windhoek may not struggle to attract investors, as the Namibian banking sectors is highly profitable.
In a report at the end of last year, Investment House Namibia said Namibian banks had remained highly profitable as evidenced by superior Return on Equity (ROE)’s and interest margins compared to South African banks.
The report showed that the banking industry is growing in its importance to the country’s economy with the ratio of banking sector assets to nominal GDP having increased since 2000 from 43 percent to 62 percent at the end of 2010.
The report found that during the 2010 financial year all the local banks reported strong earnings growth on the back of lower impairment charges and resilient net interest margins (NIM).
Standard Bank reported the highest earnings per share growth of 24.4 percent on the back of a significant decline in bad debt charges from R40.8 million in 2009 to R7.3m in 2010.
Non-performing loans (NPL) to average advances improved across the board and remains on average below 3 percent, with Standard Bank the lowest at 0.5 percent. All the banks improved their ROE, with Standard Bank with the highest at 24.4 percent, closely followed by FNB at 23.9 percent and Nedbank with the lowest at 18.8 percent. Bank Windhoek reported the fasted growth in advances during 2010 growing at 16.8 percent.
Bank Windhoek remains the fastest earnings per share (EPS) growing bank over the last 10 years.
Nedbank recorded the fastest EPS growth over the last three years, growing at a compounded annualised growth rate of 19.6 percent.
Total assets of the four local banks amounted to R52.8 billion measured at December 31, 2010.
Taking stock of total bank assets on December 31, 2010, shows that FNB remains the biggest bank in Namibia with assets amounting to R17.2b compared to the R14.3b of Standard Bank and the R14.2b of Bank Windhoek.
The report said there is a solid investment case for each of the four local banks. However, some of the local banks are starting to fall behind in terms of cost efficiency and slowing advances growth.
“We still favour Bank Windhoek and FNB Namibia as our top picks among the local banks.
“Bank Windhoek for consistent earnings growth (fastest among local banks over last 10 year period), strong advances growth, superior efficiency ratios, low Non Performing Loans ratios and rapidly increasing asset market share and FNB for its higher return on assets, higher interest margins and because it is the most cost efficient.
“Nedbank has performed well over the last three years and is fast catching up through effective cost management and strong non-interest growth,” the report said.

January 2013
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