Africa-Press – Namibia. MICRO-LENDING and banking financial group Letshego Holdings Namibia has earned a profit of N$350 million for the 2022 financial year, and is paying a record final dividend of 44,89 cents per share.
This dividend is even better than what the big players in the market and those listed on the Namibian Stock Exchange are paying, such as the Capricorn Group Limited (39 cents), Paratus Holdings (10 cents), and Mobile Telecommunications Limited (42 cents).
The recently released reviewed financial statements indicate that the financial group has achieved double digit performance growth for 2022, with profit before tax up 10% year-on-year to N$391,5 million, and profit after tax increasing 16% for the same comparative period, to N$350,4 million.
Much of this profit was earned from a solid net interest income of N$453 million from its N$4,7 billion loan book, which is at least 9,6% of the loan.
This is way above the average earned by the banking industry, which hovers around 7%.
Letshego was once criticised for its inability to grow into a fully fledged bank, but has managed to amass up N$6,1 billion for the 2022 financial year, from N$5,5 billion recorded for 2021.
Deposits have grown shy of 40% to N$538 million from N$386 million. Its N$4,7 billion loan book shot up some N$500 million from the previous year.
According to the company’s commentary, the asset quality remains strong with the Group’s loan loss ratio (LLR) at 0,22% for the year.
Although this was low, the non-performing loans (NPLs) ratio increased marginally to 4,97% for the year from 3,97% in 2021.
Most entities and banks in the financial sector had their NPLs coming down for the 2022 financial year – but Letshego’s ratio remained lower than the big banks and below the industry average of 5,6%.
Overall, the company said its bumper performance for the year was largely driven by 11% growth in advances to customers, totalling N$4,75 billion, and growth in LetsGo transactional account customers to 41 222 from 31 753 in the previous financial year.
Letshego is the only banking entity that recorded a decrease in staff and operational expenses, reducing by 3,5% due to what the company said was strict cost controls introduced during the period under review.
Cost to income ratio was also the lowest in the industry at 47% from 52% in 2021, driven down largely by revenue increases.
Last year, The Namibian reported that Standard Bank Namibia had opened a facility to lend Letshego Financial Services Namibia N$500 million, joining other banks in the cash loan business.
This drive to source local capital had the company increasing local borrowing to N$2,5 billion to finance growth and decrease reliance on parent funding.
FirstRand’s investments arm, RMB, is also lending the company money and joining the micro-lending frenzy.
The Capricorn Group already had a foothold in the industry, under Entrepo and Nam-mic Financial Services.
RMB and Standard Bank are the source of at least N$1,5 billion of Letshego’s funding, while N$512 million was obtained from the International Finance Corporate (IFC).
The IFC deal was to build affordable homes, with Letshego noting it obtained a deduction code for affordable housing.
The company said it also renewed its personal loan deduction code.
Letshego said forging ahead, it will continue to implement its digitalisation strategy, in line with ambitions to grow market share.
“Since launching our digital mall in December 2021, we have onboarded 52 400 enterprise active customers,” said the company.
The dividend has a last day to trade set for 26 May and the payout will be on 16 June.
Letshego’s shares started off the week trading at N$3,52 per share.
For More News And Analysis About Namibia Follow Africa-Press
