Letshego profit up 2%
By Hilary Mare
FOR the half year ended 30 June 2019, Letshego Holdings (Namibia) Limited increased its profit after tax by 2% to N$235m (2018: N$230m) as the group continues to work towards its diversification agenda and becoming a leading inclusive finance group.
Essentially, total revenue increased by 4% (2018: 17%), and advances to customers grew by 7% (2018: 11%).
“While the economic conditions are expected to remain challenging over the medium term, we will continue to focus on expanding our product offerings in line with our inclusive finance agenda and playing our part in supporting economic recovery and resilience. This will be developed and deployed in the context of the new Micro Lending Act, which is now effective and has implications going forward for yields in the Letshego micro lending business. Customer centricity and robust risk management remain priorities for Letshego.
“As such, we are confident that our technology-driven approach will yield sustainable value for our shareholders. The Board will continue to deploy strategies that protect the Group and its stakeholders to deliver value to all. This includes re-balancing Letshego Holdings Namibia’s leverage through capital management strategies, fund-raising from local debt providers and “sticky” retail deposit-mobilisation,” the Group said.
The group also highlighted that staff and operational expenses increased by 7% (2018: 26%), reflecting investments in people and platforms while cost to income ratio marginally increased to 24.1% from 23.6% in 2018, driven by capacity investments against compressing margins.
Impairment charge for the period was N$9.9m (2018: N$2.3m), translating to a loan loss ratio (against average gross advances) of 4% (2018:1%). Return on average equity was 17.4% (2018: 21.1%) and Return on average assets was 15% (2018: 16%). Earnings and headline earnings per share of 47 cents (2018: 46 cents) were achieved, an increase of 2% (2018:34%).
“As per existing dividend practice, no interim dividend is being declared,” explained the group.
The group further noted that it was pleased with the progress made towards embedding its LetsGo transactional and savings offerings to complement existing lending solutions.
“We continued to drive marketing strategies in support of our LetsGo omni-channel solution and this has given traction to our deposit mobilisation agenda.”
Over the past six months, the group has expanded banking capabilities by establishing an access point in Mondesa, Swakopmund and are now poised to offer full banking services in three branches countrywide.
“The rest of our existing footprint will be upgraded in the impending future as we accelerate our diversification strategy.
“To remain relevant, we continued to focus on improving the lives of our customers by re-engineering our internal processes and exploring strategic partnerships which will enhance our customer value proposition.
“During the period under review, we have made necessary investments in our human capital to ensure that we are geared to deliver an excellent service to our customers. We continued to strengthen our internal control environment in an effort to mitigate operational risks and maintain the quality of our portfolio. As a strategic enabler, we continue to invest in technology solutions as we adopt a “phygital” business model to serve our customers at lower cost by blending digital innovations into physical processes and channels,” further stated the group.