annual financial statements - Nedbank Group Limited

10 NEDNAMIBIA HOLDINGS LIMItED ANNUAL REPORt 2010
cHairman’s report
NEt PROFIt AFtER tAx
N$143,3m
23%
REtURN ON SHAREHOLDERS EqUIty
18,9%
tHe nAmiBiAn economy enJoyed positive if
unspectAculAr groWtH in 2010. tHere WAs A
recovery in diAmond output from tHe loW
of 2009 And gold, copper And mAngAnese
production HAd A good yeAr As internAtionAl
gold And copper prices reAcHed record HigHs.
urAnium And zinc production remAined flAt,
HoWever. tHe fisHing industry HAd A poor yeAr.
a solid YeaR… but RegulatoRY PRessuRe gRows
overall credit and money supply growth picked up over the year but remained weaker
than expected, thus helping to prompt further cuts in interest rates by the Bank of
namibia. there was an improvement in passenger vehicle sales over 2009, signalling
a wider strengthening of consumer spending. there were also steady increases in
a range of other indicators, including commercial vehicle sales and building plan
approvals in Windhoek and Walvis Bay, though completions in these two locations
were lower for most of 2010.
With the economy moving off the lows of 2009, nednamibia Holdings was able to
record another year of growth. the group achieved a 23% increase in net profit after
tax to n$143,3 million and an 18,9% return on shareholder’s equity. there were
solid contributions from the major subsidiary, nedbank namibia, and the revitalised
life assurance business, nednamibia life Assurance company, which extended the
scope of its operations. the specialist finance business, nedcapital namibia, had a
less impressive year and will be realigned to meet market expectations.
the managing director’s review on the following pages provides insight into the
group’s financial and operational performance. the Board appreciates the efforts
of management and staff in recording the commendable overall gains. their focus
on even better client service and expense management resulted in a further
improvement in the efficiency ratio.
Amidst increased regulatory pressure and legislative activity, the banking industry has
successfully responded to the challenge of the governor of the Bank of namibia to
reduce the spread between banks’ prime rate and the namibian repo rate. An issue
of continuing concern to the industry relates to the Banking institutions Act. this
confers wide powers that need to be applied judiciously if the industry’s relationships
with the regulator are not to be subjected to further challenges.
on the legislative front, amendments to exemption no. 189 of 2004 issued under
the usury Act, governing micro-lending, were proposed and it is likely the financial
institutions and markets Bill will be promulgated in 2011.