The 15 months to 31 December 1999 were characterised by substantial profit growth for Commercial Bank of Namibia, reflecting the clear benefits of restructuring programmes implemented in previous periods. The bank recorded excellent results for the period, despite a subdued domestic economy, still high interest rates and a lack of international appetite for emerging markets.

Net income before tax rose 71,6% (37,3%) from N$33,1 million to N$56,7 million. During the review period, corporate tax rates were decreased resulting in a deferred tax rate adjustment of N$4,3 million. Consequently net income after tax rose even further by 114% (65,8%) from N$20,7 million to N$44,3 million. Capital and reserves increased 39,5% from N$88,0 million to N$122,7 million, giving the bank a capital adequacy ratio of 14,6%, well above the stipulated level of 8,0% and in line with international standards.

These pleasing results were underpinned by a 9,7% growth in total assets to N$1,7 billion, prudent asset and liability management and steady growth in income from commissions, fees and foreign exchange business, boosting the bank’s non-interest revenue by 55,5% (24,4%). Expenses increased to N$83,4 million, translating into a satisfactory cost-to-income ratio of 53,5%.

The bank’s performance at operating income level reflects a continuing conservative view on credit risks, with the income statement showing a charge of N$15,9 million for specific and general provisions, down by 7,4% (25,9%) compared to the previous year.