Global economic crisis - Despite uncertain economic conditions which are prevailing after the global economic crisis, Bank Windhoek has reported an annual growth of 12% in net profit after tax to N$276.9 million for the 2010/2011 financial year. According to the bank, the major contributors to the increase in profit, was a focused funding strategy as well as sound credit management processes.

The bank's operating expenses grew by 12% from the previous financial year, resulting in an improved cost to income ratio of 58% from 60% in the previous year.

"Investment into human capital continues to be the largest contributor to operating expenses with the number of employees increasing to 1250 permanent employees, followed by information technology costs. Bank Windhoek keeps abreast of technology changes, an area identified by the bank as a key strategic driver," said Christo de Vries, the bank's managing director.

Gross advances increased with N$1.7 billion, representing a 15% growth, primarily as a result of new business from the mortgage loan portfolio.

According to Bank Windhoek, regardless of this growth, the provision for bad debts is well maintained and below industry norms at 0.8%.

Capital management remains a focus for the bank's stakeholders, with the total risk-weighted capital ratio increasing from 12.6% in the previous year to 13.2% in the current year.

"Looking ahead, there is continued uncertainty in the global economic environment and with increased regulation on capital and liquidity requirements, it will remain a challenging environment to navigate.

"Risk management, to identify and address internal risks arising from the operations of the bank, as well as external risks arising from the external environment in which the bank operates, will remain a key focus.

"Bank Windhoek furthermore remains committed to strive for excellence and to make a difference in the lives of all our stakeholders. Furthermore we will continue to deliver on the commitments we have made to our shareholders," concluded de Vries.

Namibia Economist/23/09/2011