Tackling Covid-19 with digital tools

Jo-Maré Duddy – SBN Holdings provided debt relief of N$1.4 billion to its clients impacted by Covid-19 in the half-year ended 30 June 2020.

Following the Bank of Namibia’s guidelines for credit relief, SBN Holdings invited its clients in the tourism industry, small and medium enterprises (SMEs) with revenue below N$10 million, as well as students and other clients impacted by Covid-19 to apply for capital and/or interest payment moratoria. More than 97% of applications for relief was approved, the group says in its latest interim results.

“The Covid-19 outbreak has marked a turning point in the global economy, ushering uncertainty into a year that had been expected to mark the beginning of Namibia’s long-awaited journey towards economic recovery. This unique circumstance has exacerbated the prolonged slump of the Namibian economy,” SBN Holdings says.

The pandemic, and its consequences, have not only impacted businesses financially but also tested the resilience of businesses in Namibia, the group adds.

SBN Holdings started to prepare a response plan for the pandemic in January 2020 and implemented it as soon as the first two Namibian cases were announced.

“When lockdown started on 27 March 2020, 50% of our employees were already working from home which increased to about 70% of our employees working from home during the lockdown period. We have maintained a ’work from home’ policy, where possible, after the relaxation of the lockdown measures. As at 30 June 2020, half of our employees continued to work from home to ensure the safety of our people and our nation.”

Through-out the pandemic, SBN Holdings’ businesses have continued to provide uninterrupted services to its clients, testimony to the resilience of its systems and the agility of our employees.

‘FUTURE-READY’

“Our 2020 aspirations of being a future-ready, agile and digital business centred on our clients remained our key focus during these challenging times,” SBN Holdings says.

“We are pleased to see a significant increase in the uptake of our digital products and channels during the pandemic, with specific reference to our card-less payment platform, PayPulse.

“We believe that the levels of penetration and adoption seen in the current year has established PayPulse as a preeminent transactional and payment medium in the country, and we look forward to its exponential growth in the second half of this year and the years ahead,” the group says.

Even though Namibia was in lockdown, SBN Holdings’ digital transformation team embraced the latest virtual collaborative technological tools to drive and implement our broader digital transformation strategy. The output from this work is being prioritised for commercialisation.

RESULTS

SBN Holdings, with Standard Bank Namibia as its flagship brand, reported a profit after tax of about N$226.89 million for the six months ended 30 June 2020, down 19.6% compared to the same period last year.

“The impact of Covid-19 on our operating and business activities is evident in our financial results,” the group says.

SBN Holdings’ net interest income declined by 4.3% to N$630 million due to the 2.75% reduction in prime interest rate since June last year, as well as a decrease in loans and advances to customers.

Gross loans and advances to customers fell by 3.3% or about N$756.5 million on an annual basis to around N$22.4 billion at the end of June 2020.

The group said the decrease was “in line with subdued private sector credit extension activities which have seen its lowest growth year-on-year since 2002”.

SBN Holdings said non-interest revenue declined by 3.6% to N$587 million due to a decrease in volume-based fees as a result of Covid-19.

The group’s latest results show credit impairment charges of nearly N$151.2 million. This is an improvement of 15.3% compared to the previous half-year.

“The prior year impairment included a charge of N$71 million raised in respect of one sector that has not reoccurred during 2020,” SBN Holdings says.

However, the group adds: “The group has stress-tested future macroeconomic scenarios with resulting provisions raised attributed to Covid-19. Adjusting for the large provision raised in 2019, our provision increased by N$44 million (41%), which reflects the impact of Covid-19 on credit impairments.”

ADEQUATE CAPITAL

SBN Holdings’ operating expenses increased by 7.7% to N$743 million during the period under review, which the group attributes to a decline in headcount which supported slower growth in staff costs.

“Other operating expenses increased due to higher spend on security and digital capabilities in support of our vision to put our client at the centre of what we do,” SBN Holdings says.

The group’s capital and liquidity position remained strong, with a total capital adequacy ratio of 15.6% and the liquidity position in excess of all internal and regulatory requirements, according to the group.

SBN Holdings listed on the Local Index of the Namibian Stock Exchange (NSX) in November last year. Its closing price at the end of 2019 was N$9.20 per share. The group ended 27 November at N$6.90 per share.