Letshego Bank Namibia Limited is considered a core operating entity in Letshego Holdings Namibia Limited, as such, the national scale issuer ratings on the bank reflect the strengths and weakness of the wider LHN Group. The ratings are restrained by the relatively weaker business profile in comparison to domestic commercial banks characterised by its small size, moderately high cost of funding and relative lack of diversity.
The outlook is stable, balancing the strain of the operating environment with a sound financial profile. We expect a strong GCR capital ratio for the next two years balancing its very solid position, with solid internal capital generation and higher provision requirements. We anticipate the cost of risk to rise to a still solid 1%, due to operating volatility, elevated asset quality risk and product concentration risk.