Standard Bank buys stake in Mobipay

 Lazarus Amukeshe

ELECTRONIC payment solutions company Mobipay has sold 50,9% shareholding to Standard Bank Namibia Holdings for N$53,2 million, which will see the bank taking control of its services.

This was stated in the group's financial statements for the six months ending 30 June 2019 released last week, showing that Standard Bank had made an after tax profit of N$282 million, a 10,6% increase from N$255 million recorded at interim in 2018.

MobiCash Payment Solutions (Pty) Ltd (Mobipay)'s sale was concluded in April 2019, and the group's goodwill was valued at N$39 million, about 73% of the purchase price.

Mobipay's net assets at acquisition were worth only N$20 million.

“The goodwill is attributable to the group's intention to have influence and control over the services provided by MobiPay due to the significant risk it creates should Mobipay cease to operate,” read the note on the financial statements.

For the months April to June 2019, Mobipay brought to the Standard Bank group revenue of N$19,2 million and a net loss of N$1,4 million.

For the six months, the Standard Bank group made a consolidated net interest income of N$658 million, just above income they received from transaction and other fees at N$608 million. At 2018 interim, net interest income and non-interest income stood at N$596 million and N$532 million, respectively.

Operating expenses for the six months stood at N$689 million, downing the cost to income ratio to 54,42% from 62,42% recorded last year.

On deposits, there was a healthy growth of 9,9% to N$26 billion while loans and advances still stand below their lending which was N$22 billion.

Mortgages still top the group's loan book at N$11,08 billion, and approximately 22% of the total banking sector's mortgage loan book, followed by other loans and advances at N$3,6 billion.

Simonis Storm recently reported that there was a worrying increase in unsecured loans, especially borrowing through overdraft facilities which makes up 39,8% of total unsecured lending.

“Further increases in unsecured lending could lead to worryingly high levels given the depressed business environment,” Simonis had cautioned.

ADVANCES QUALITY

On loans and advances quality, the group recognised an impairment of N$178 million, an increase of N$129 million from N$49 million written down at last year's interim.

According to the financial report, only N$29 relates to IFRS 9 adjustment while N$79 million relates to one sector, which analysts believe to be the property sector where the bank has an N$11 billion asset.

“Adjusting the credit loss ratio, it remains acceptable at 73bps, increasing from 45 bps in June 2018,” read the note.

On capital adequacy, the prescribed minimum reserves of capital which a bank must have available, the ration downed to 10,63% but still above the 10% central bank's ceiling.

The group has a healthy balance sheet of N$33 billion. The full interim financial statements are available on the group's website.