SBN Holdings Limited Registration No. 2006/306 Registered in Namibia JSE Bond Issuer Code: STINM Short Name: SBN Holdings Limited (the “Company”) CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 31 December 2023 • BASIC EARNINGS PER SHARE OF 147 CENTS (2022: 119 CENTS) • HEADLINE EARNINGS PER SHARE OF 150 CENTS (2022: 119 CENTS) • FINAL ORDINARY DIVIDEND PER SHARE OF 58 CENTS (2022: 46 CENTS) • TOTAL DIVIDEND PER SHARE OF 100 CENTS (2022: 66 CENTS) Results Key highlights from SBN Holdings Limited results for the period under review include: • Profit for the year increased by 23.3%, up from N$624 million to N$770 million. Main contributors to this growth are the increase in net interest income of 24.6%, mainly due to the positive endowment effect ensuing from continued repo rate increases, 32.2% growth in trading revenue, 28.5% increase in bancassurance and increase in property related revenues. Due to strong income growth, the Company achieved a difference between income growth and cost growth (JAWS) of 160 bps. • Net interest income grew by 24.6% to N$1 800 million year on year. This was due to an improved net interest margin from 4.4% in 2022 to 5.2% in 2023 driven by balance sheet growth and the positive endowment effect ensuing from continued repo rate increases, which increased by 100 basis points (bps) from 6.75% to 7.75%. • Non-interest revenue increased by 13.4% to N$1 455 million, driven by a 32.2% growth in trading revenue from increased client flows and volatility in currency markets. Other revenue grew to N$199 million from N$146 million year on year. This 36.6% growth is mainly due to a 28.5% increase in bancassurance revenue, and an increase in property-related revenue earned mostly from the Spearmint property portfolio. • Credit impairments increased marginally by 1.4% year on year, as a result of the current economic environment placing increased pressure on clients. The credit loss ratio (CLR) decreased marginally to 0.59% compared to 0.60% in prior year. The Company continues to closely monitor the CLR and its short- and long-term strategic initiatives on non-performing loans. • Operating expenses increased by 17.7% (normalised 11.7%) when compared to 2022. The increase originates from a 29.4% uptick in other operating expenses, driven by increases in IT expenses of 35.5% to support client growth strategies and once off expenses incurred for the impairment of the underlying Spearmint properties and goodwill. The net impact of this is a 1 marginal decrease of the cost to income ratio to 60.7% (normalised 57.6%) from 61.7% in the prior year. • Gross loans and advances to customers (excluding banks) decreased to N$22.4 billion from N$23.0 billion last year. The Corporate & Investment Banking (CIB) portfolio decreased by 2.4% to N$5.2 billion, mainly due to an early redemption of preference shares in the current period. The Personal & Private Banking (PPB) and Business & Commercial Banking (BCB) portfolios declined by 3.0% to N$17.2 billion. Significant decreases were noted in the home services (4.1%) and other loans and advances (5.4%) categories. Vehicle and asset finance grew by 3.7% following successful campaign runs throughout the year. • There was a significant increase in deposits from customers and banks of 10.4 % to N$30.2 billion, mainly driven by an increase in demand deposits, which was offset by a decrease in negotiable certificates of deposits (NCDs). These changes reflect the Company’s efforts to change its deposit mix to meet strategic goals. Debt securities decreased by 11.8% following the redemption at maturity of the SBKN23 bond with an issuance volume of N$300 million during the year. The Company’s liquidity position remained strong and within approved risk appetite and tolerance limits. The Company continuously ensures that it has sufficient marketable assets available in its portfolio to meet the outflow demand in both business-as-usual as well as stressed circumstances. • The ROE improved to 15.6% from 13.7%. The Company is tracking ahead of its ROE target of a minimum of 15% by 2025. The Company remained well capitalised with the total regulatory capital ratio at 20.7% (2022: 17.7%) and the total tier 1 capital ratio at 18.2% (2022: 15.6%). These ratios are above the Regulatory minimum. Business update Operating environment Namibia’s gross domestic product (GDP) growth for 2023 is estimated to decline to 3.9% from 7.6% GDP of 2022. The slowdown in domestic GDP growth is mainly due to weaker demand in global and domestic economies, underpinned by ongoing high inflation and high interest rates that have a negative impact on consumer spending. In addition, the high base effects from the mining industry, due to expansion in diamond mining and other mining and quarrying in 2022 were not repeated resulting in a further decline in growth in 2023. Growth in the global economy slowed down in 2023 compared to 2022, because of slower growth in some advanced economies. Weaker growth was noted for major economies such as China, Japan, the Eurozone area, and the United Kingdom. This was a combined effect of the contractionary monetary policy stances taken to curb rising inflation and slower trading – partner demand. The impact of this slowdown is a weaker global demand which negatively impacted the growth of many economies. Notwithstanding the noted economic challenges, a recovery in consumer demand and commodity prices is expected for Namibia bringing a turnaround in the domestic GDP. 2 Delivering our strategic objectives Delivering our 2025 ambition and fulfilling our purpose requires us to consistently focus on transforming our clients’ experience, executing our operations with excellence, and driving sustainable growth that creates lasting value for our various stakeholders. We continue to invest and develop products and solutions that meet our clients’ needs. Our client centric approach to business helps us have a deeper understanding of the challenges our clients face and how to solve for these. Our financial results reflect the success of our efforts and show strong performance and year on year growth with profit after tax growth of 23.3% and ROE increasing to 15.6% from 13.7%, 190 basis points (bps) better than in 2022. Headline earnings improved by 25.9% to N$784 million in the 2023 financial year. We would not have achieved these great results without the tireless effort of our people to execute with excellence. Transforming our client’s experience requires an engaged people and we acknowledge the close relationship between our people, culture and strategy delivery. Employee engagement is therefore one of our priorities, with initiatives that not only support the wellbeing of our people, but also include leadership and culture transformation, talent management and reskilling and upskilling our people to have future ready skills. In living our purpose – Namibia is our home; we drive her growth – our success extends beyond our economic contribution to how we interact with the communities in which we operate and stakeholders with whom we choose to interact. Our commitment to sustainable growth, therefore, also considers the environmental and social impact of our decisions, and the actions, views, and preferences of our stakeholders. Dividend The Board recommended a final ordinary dividend of 58 cents per share (2022: 46 cents per ordinary share). The salient dates are as follows: Last day to trade cum dividend: 10 May 2024 First day to trade ex–dividend: 13 May 2024 Record date: 17 May 2024 Payment date: 31 May 2024 3 Looking ahead Namibia’s economic performance is expected to continue on a positive trajectory with stable growth expected over the remainder of the forecast period to 2027. Growth will be supported by a broader and more sustained recovery across most sectors of the economy, while structural reforms implemented by the sovereign will continue to aid growth over the medium-term. Looking ahead, our strategic focus areas of transforming client experience, executing with excellence, and driving sustainable growth and value for all stakeholders, will guide our actions. We recognize the vital role that the bank plays in society, and we are committed to fulfilling that role with integrity and purpose. H MAIER E TJIPUKA CHAIRMAN CHIEF EXECUTIVE 14 March 2024 4 BOARD OF DIRECTORS: H Maier (Chairman) S Hornung STB Madonsela JS Mwatotele JG Riedel PL Schlebusch NA Tjipitua IAH Tjombonde E Tjipuka AT Matenda COMPANY SECRETARY S Tjijorokisa AUDITOR’S OPINION The consolidated financial statements are an extract from the audited financial statements for the year ended 31 December 2023. The auditor’s unqualified audit opinion on the financial statements is available for inspection at the Company’s registered office. The information in this announcement has been extracted from the audited financial statements, but the announcement itself is not audited. REGISTERED OFFICE 1 Chasie Street, Kleine Kuppe, Windhoek; P.O. Box 3327, Windhoek, Namibia AUDITORS PricewaterhouseCoopers 344 Independence Avenue, Windhoek Debt Sponsor The Standard Bank of South Africa Release date: 14 March 2024 5 SBN HOLDINGS LIMITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 December 2023 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2023 Change Audited Audited 31 December 31 December 2023 2022 % N$' 000 N$' 000 Net interest income 24.6 1 800 015 1 444 802 Non-interest revenue 13.4 1 455 093 1 283 086 Total income 19.3 3 255 108 2 727 888 Credit impairments 1.4 (163 411) (161 213) Income before operating expenses 20.5 3 091 697 2 566 675 Operating expenses 17.7 (1 976 192) (1 678 675) Net income before tax 25.6 1 115 505 888 000 Taxation (indirect and direct) 31.1 (345 792) (263 720) Profit for the year 23.3 769 713 624 280 Profit attributable to ordinary shareholders 22.9 766 267 623 603 Other comprehensive income net of taxation that will not be reclassified to profit or loss Net change in fair value of equity financial assets measured at fair value through other comprehensive income (FVOCI) (170.2) 1 319 (1 879) Fair value movement on post-employment benefit (223.8) (6 458) 5 216 Total comprehensive income for the year 21.8 764 574 627 617 Attributable to ordinary shareholders 21.4 761 128 626 940 Attributable to non-controlling interests 409.0 3 446 677 EARNINGS PER SHARE Profit for the year attributable to ordinary shareholders 22.9 766 267 623 603 Weighted average number of shares issued — 522 472 522 472 Basic earnings per share 22.9 147 119 6 CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 December 2023 Change Audited Audited 31 December 2023 31 December 2022 % N$' 000 N$' 000 Assets Cash and balances with central banks 0.1 1 675 382 1 673 337 Trading assets and financial investments 40.8 7 598 613 5 397 635 Loans and advances to banks 46.2 5 430 842 3 714 600 Loans and advances to customers (3.3) 21 523 048 22 254 850 Properties in possession (10.6) 439 255 491 154 Other assets (6.6) 2 002 450 2 143 121 Total assets 8.4 38 669 590 35 674 697 Liabilities Deposits from banks (84.1) 227 037 1 430 532 Deposits from customers 15.7 29 982 380 25 922 875 Debt securities (11.8) 2 230 957 2 528 252 Other liabilities 13.0 1 141 425 1 010 046 Total liabilities 8.7 33 581 799 30 891 705 Equity 6.4 5 087 791 4 782 992 Total equity and liabilities 8.4 38 669 590 35 674 697 7 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2023 Ordinary Fair value share Share- adjustment Post- capital based s on FVOCI employment Statutory Ordinary Non- and payment financial benefit credit risk Retained shareholder controlling premium reserve assets reserve reserve earnings s equity interest Total equity N$'000 N$'000 N$'000 N$'000 N$’000 N$'000 N$'000 N$'000 N$'000 Balance at 1 January 2022 643 234 — (1 221) 43 902 133 383 3 504 125 4 323 423 14 853 4 338 276 Total comprehensive income for the year — — (1 879) 5 216 — 623 603 626 940 677 627 617 Profit for the year 623 603 623 603 677 624 280 Other comprehensive income after tax for the (1 879) 5 216 3 337 3 337 year Transactions with the shareholders, — — — — (24 083) (158 818) (182 901) — (182 901) recorded directly in equity Transfer between reserves (24 083) 24 083 — — Dividends paid (182 901) (182 901) (182 901) Balance at 1 January 2023 643 234 — (3 100) 49 118 109 300 3 968 910 4 767 462 15 530 4 782 992 Total comprehensive income for the year — — 1 319 (6 458) — 766 267 761 128 3 446 764 574 Profit for the year 766 267 766 267 3 446 769 713 Other comprehensive income after tax for the year 1 319 (6 458) (5 139) (5 139) Transactions with the shareholders, recorded directly in equity — — — — 100 498 (560 273) (459 775) — (459 775) Transfer between reserves 100 498 (100 498) — — Dividends paid (459 775) (459 775) (459 775) Balance at 31 December 2023 643 234 — (1 781) 42 660 209 798 4 174 904 5 068 815 18 976 5 087 791 8 CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31 December 2023 Audited Audited 31 December 2023 31 December 2022 N$’000 N$' 000 Net cash flows from/(used in) operating activities 2 301 109 (87 195) Cash flows from operations 1 429 311 1 356 237 Net movement in operating assets and 1 213 839 (1 271 187) liabilities Dividends received — — Direct taxation paid (342 041) (172 245) Net cash flows used in investing activities (92 095) (69 814) Capital expenditure on property and (66 417) (50 196) equipment Proceeds from sale of property and 2 743 5 045 equipment Capital expenditure on intangible assets (28 421) (24 663) Net cash flows (used in)/from financing activities (774 578) 349 286 Net senior debt issued — 400 000 Senior debt redeemed (300 000) — Principal element of lease payments (14 803) (17 813) Subordinated debt issued — 250 000 Subordinated debt redeemed — (100 000) Dividends paid (459 775) (182 901) Net increase in cash and cash equivalents 1 434 436 192 277 Cash and cash equivalents at the beginning of the 4 783 533 4 739 268 year Effects of exchange rate changes on cash and 38 840 (148 012) balances with central banks Cash and cash equivalents at the end of the year 6 256 809 4 783 533 9 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. Reporting entity SBN Holdings Limited is a company incorporated in Namibia (Registration number: 2006/306). The consolidated annual financial statements for the year ended 31 December 2023 comprise the Company, its subsidiaries and other controlled entities, together referred to as the “Company ”. 2. Statement of compliance The consolidated financial statements have been extracted from the audited financial statements for the year ended 31 December 2023, which have been prepared in accordance with IFRS Accounting Standards (IFRS). The annual financial statements were approved by the Board of Directors on 12 March 2024. 3. Significant accounting policies The accounting policies applied in the annual financial statements as at and for the year ended 31 December 2023, are consistent with the prior year, except for the adoption of new and amended IFRS’s that became effective for the current financial period. In accordance with the requirements of the transition methods chosen by the Company in applying these standards, comparative information throughout the annual financial statements has not been restated. 4. Earnings per share Change Audited Audited Headline earnings reconciliation 31 December 2023 31 December 2022 % N$’000 N$’000 Profit for the year attributable to ordinary shareholders 22.9 766 267 623 603 Adjusted for: IAS 16 (Profit) on sale of property & equipment (64.2) (833) (2 330) IAS 36 Impairment losses on property and equipment (62.0) 459 1 207 IFRS 3- Goodwill impairment 100 17 629 — Headline earnings 25.9 783 522 622 480 Net asset value per share (cents) 6.3 970 912 Basic earnings per share (cents) 22.9 147 119 Headline earnings per share (cents) 25.9 150 119 10 Changes to the board During the year, the following changes to the composition of the board occurred: • Ms NA Tjipitua was appointed on 10 March 2023. • Mrs L du Plessis resigned on 24 April 2023. • Mrs M Shivute Dax retired on 24 April 2023. • Mrs S Brugman resigned on 10 July 2023. • Mr JS Mwatotele was appointed on 20 July 2023. • Mr JG Riedel was appointed on 20 July 2023. • Mrs M Geises resigned on 31 July 2023. • Mrs B Rossouw retired on 30 September 2023. • Mr E Tjipuka was appointed on 1 October 2023. • Adv N Bassingthwaighte retired on 31 December 2023. • Mr STB Madonsela was appointed on 2 February 2024. • Mr AT Matenda was appointed on 2 February 2024. 11