Letshego Bank Namibia Limited

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Letshego Bank Namibia Limited (2021-11)
  • Letshego Bank Namibia Limited
  • Year : Nov 2021
3 Tokens
USD 300.00

The report includes the following rated entities: Letshego Bank Namibia Limited, & Letshego Micro Financial Services Namibia (Pty) Limited. Funding is weaker than the market average with a higher reliance on market derived funding and LHL support. Cost of funding was moderately high, around 8.3% at 31 December 2020 because of high reliance on intercompany loans (73% of liability funding). The combined funding and liquidity score was moderated (reflecting lower stand-alone liquidity) with a commensurate improvement reflected in parental support. The Group is largely funded by borrowings contributing 81% to total liability funding through intercompany loans (c.39%), two banking facilities and a bond programme on 30 June 2021.

Additional Information

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 cementing its very solid position, with solid internal capital generation. We could raise the ratings if the regulator renews the deduction code in the short to medium term, if LHN raises and maintains a more diversified long-term funding structure and if over the longer-term there is an improvement in the business diversification without a deterioration in asset quality.

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