CEO Statement:

I am pleased to confirm that FNB Namibia Holdings Ltd supports the ten principles of the United Nations Global Compact in respect to human rights, labour rights, the environment and anti-corruption. With this communication, we express our intent to support and advance those principles within our sphere of influence. We commit to making the Global Compact and its principles part of the strategy, culture and day-to-day operations of our company and undertake to make a clear statement – to our employees, partners, clients and to the public – of this commitment.

We recognize that a key requirement for participation in the Global Compact is the annual submission of a Communication on Progress (COP) that describes our company’s efforts to implement the ten principles. We support public accountability and transparency, and therefore confirm our commitment to report on progress every year according to the Global Compact COP policy.

ADV. VEKUII RUKORO

CEO: FNB NAMIBIA GROUP

FNB Namibia profile

FNB Namibia has a proud heritage of excellence in service delivery of more than a hundred years. This began when Deutsche Afrika Bank (DAB) opened its doors in July 1907, making it the first commercial bank to operate in the then Deutsch Südwest-Afrika from its own premises.

In 1920, the National Bank of South Africa (NBSA) obtained majority shareholding of DAB after the dramatic devaluation of the Reichmark. NBSA thereafter sold the remainder of DAB to the Commercial Bank of South Africa for N$1,275 in 1923. DAB was subsequently put into liquidation.

In 1926 National Bank was integrated with Barclays Bank and in 1971 Barclays Bank changed the name of the South African operation to Barclays National Bank Limited. In December 1987, the bank was renamed First National Bank of Southern Africa after a change in shareholding. In February of the following year, First National Bank of South West Africa/Namibia Limited was incorporated.

The bank was listed on the Namibian Stock Exchange in 1997, nine years after it became FNB South Africa’s Namibian subsidiary. In 2003, FNB Namibia merged with Swabou, a mutual society, forming FNB Namibia Holdings Limited, an entity listed on the Namibian Stock Exchange (NSX). In 2004, we launched a Black Economic Empowerment (BEE) transaction, which will result in a reduction of South African-based FirstRand ownership to 55%, while 45% of FNB Namibia Holdings will be owned by Namibians. Today, FNB Namibia is the largest locally listed company in Namibia with a market capitalisation of N$3.1 billion, which represents almost 44% of the NSX’s total market capitilisation.

We provide fully integrated financial services solutions through a network of 49 branches and agencies, 221 ATMs and Mini-ATMs and almost 2,050 point-of-sale devices throughout Namibia. We operate based on a BancAssurance model and provide a broad range of products and services to customers ranging from entry-level consumers, high net-worth individuals, small and commercial businesses, to corporate and public sector clients. We are one of the largest employers in Namibia and our workforce consists of more than 1,750 people of whom 64% are female, and only six are expatriates.

Stakeholder engagements

FNB Namibia operates in line with our group philosophy which governs how we operate and interface with a broad range of stakeholders. We believe that the existence of our business and the continued success is dependent on the relationships that we have with our stakeholders.

Our stakeholders are represented by our staff, customers (including individuals, small business, large corporates and parastatals) suppliers, the communities we support and invest in, the natural environment, our regulators and related authorities, and FNB Namibia investors and shareholders.

We also work with industry bodies and special interest groups (including our industry peers) to address specific issues of interest. This stakeholder approach enables us to identify and address material issues within the environmental, economic, social and governance domain, taking into account our operating context and their impact on our stakeholders. We measure and report our progress on creating stakeholder value and managing risks at FNB Namibia.

Our staff

Key impacts / We consider our more than 1,755 people to be the most important internal driver of our success. We thus focus on building enduring, rewarding relationships with our staff and to develop their optimal potential to support the strategic aims of the organisation.
Key Challenges / Staff with financial services skills remains in short supply in Namibia and thus the retention of high-quality staff. The 2010 version of our People-Pillar-Survey (PPS) revealed that we need to improve in the three areas of leadership, training and development and reward.
Key Achievements / We launched a comprehensive talent management framework to address some of the challenges mentioned above. We acknowledged our staff with a range of incentive programmes such as incentive packages for top-achievers to attend the 2010 World Cup. We increased the participation in the PPS to more than 80%. Our employee wellness policy was revised and implemented with several wellness initiatives undertaken, covering topics such as HIV/AIDS, drug abuse, ill health, financial difficulties and counselling sessions.
Key future priorities / Our employees remain central to our future success. We will continue to recruit, develop, retain and reward our staff in such a manner that we remain Namibia’s leading financial services group. A special focus will be on addressing the areas of under-performance as identified in our PPS mentioned above. We will finalize the implementation of the Oracle Human Resources Management System (HRMS) that will automate many of the current manual human resource processes.

Our customers

Key impacts / For our customers we provide products and services to service their full range of financial requirements, inclusive of transactional, savings, investment and risk needs. In the process we aim to provide our banking services to the approximately 600,000 economically active Namibians and engage with customers ranging from entry-level consumers, small businesses, corporate businesses and public sector clients.
Key Challenges / Customers continue to expect of us to deliver innovative, effective, competitive and value-for-money financial products and solutions across a broad range of convenient, easily accessible and secure platforms. Supporting their needs extend to understanding the challenges of an un-banked market and providing them with access to financial services. Card and electronic fraud scams such as phishing, skimming and cloning is on the increase and the development of more secure transaction methods and customer education remains vital.
Key Achievements / We continued to promote the use of cost-effective electronic channels and we have maintained our free cellphone banking offering while using our partnership with VISA to persuade customers to switch to more appropriate electronic channels. We were again able to contain our pricing increases in line with the consumer price index and are still informing our customers about the most cost effective banking solutions by means of the most comprehensive pricing guide in Namibia. A state-of-art electronic contact centre was introduced to offer one-stop customer support.
Key future priorities / With a focus on customer satisfaction, it will remain a priority to dive consumer education and protect their rights, offer best-of-bread products and services through a comprehensive set of channels. We will focus on fighting card and online fraud. In this regard, our inContact service will remain free. The renewed focus on service improvement will be intensified in future. We will continue to refine our customer loyalty and experience measurements and complaint resolution processes.

Our environment

Key impacts / Although the environmental impact of our operations is limited, we endeavour to be environmentally conscious in everything we do and to set new trends wherever we can.
Key Challenges / Reducing energy costs and carbon emissions requires the quantification of energy usage and identifying energy saving opportunities. Reducing the use of paper and becoming more energy efficient continue to pose challenges to our operations.
Key Achievements / We contracted Global Carbon Exchange (GCX) to conduct a detailed energy-efficiency audit and have developed an emission reduction and energy saving strategy based on the findings. Reduction of paper usage was promoted by improved branch printing protocols and by running campaigns to convince customers to rather opt for electronic statements.
Key future priorities / We will keep on to refining and rolling out our mission reduction and energy saving strategy and other wastage reduction initiatives.

Our operations

Key impacts / FNB, with its national footprint and full bouquet of world class systems, products and services offer a secure, reliable and cost effective network of delivery channels to the full spectrum of customers across the country and internationally. We operate in line with our group philosophy of empowerment, which governs how we operate and interface with a broad range of stakeholders. This mode of operation is underpinned by a key set of values of being a good corporate citizen. Our business has its own governance structures and the Namibian management team is tasked with making both strategic and operational decisions and driving the sustainability agenda.
Key Challenges / A key challenge remains to replace cumbersome manual or repetitive processes with smarter automated integrated processes. The culture of continuous improvement across the FNB group must still be properly institusionalised.
Key Achievements / Another initiative that led to major efficiency gains and cost savings was the staff innovations campaign. Staff were acknowledged and rewarded for logging innovative ideas. Implementing just four of the ideas led to a cost saving of close to N$5 million.
Key future priorities / Improving efficiencies and reducing operational costs remains a key focus for the FNB group. We will continue to implement systems and procedures that reduce manual processes and increase customer friendly ways of working. The participation and acknowledgement of all our staff to help identify opportunities to work smarter will remain important.

Our suppliers

Key impacts / FNB, as one of Namibia’s largest corporate groups and largest consumer of services, is in full support of the requirements of the new Financial Services Charter. Through our procurement policies we support Government’s drive to grow local companies and to achieve a more balanced society.
Key Challenges / Without a formal supplier BEE accreditation process it remains a challenge to monitor the allocation of contracts to BEE and SME accredited suppliers.
Key Achievements / In this financial year, we made use of 195 suppliers, with new suppliers added on a regular basis as alternative sources of supply are sourced. More than 90% of our procurement spend are with local suppliers, while the sourcing of products and services are done primarily in the local market.
Key future priorities / We will remain focused on the need to accelerate our local procurement spend as part of our commitment to support local developing enterprises. As such, we will actively engage in product sourcing and research to identify opportunities for local supplier procurement.

Our awards

Key impacts / We believe that our first responsibility is to look after the needs of all our stakeholders. To this end, it is always gratifying to receive acknowledgement for what we do.
Key Challenges / A key challenge is to keep our focus on getting key activities right, communicating achievements appropriately and to only celebrate bona fide acknowledgements , rather than the many marketing and commercial recognition tricks on offer.
Key Achievements / FNB was awarded the prestigious Bracken Award as the best bank in Namibia with 144 other country winners at the Banker's 10th Bank of the Year Awards in association with UK Trade and Investment. The FNB Namibia Annual Report was again acknowledged by the Chartered Company Secretaries of South Africa, for the fourth time in a row, as the best for listed companies outside South Africa. Our home loans valuation methodology was also acknowledged through a PMR award for the most work done in the sector to stimulate economic growth and development in Namibia.
Key future priorities / Our priorities will continue on adding value to all our stakeholders, rather than focus on awards. However, we believe that as a top achiever, it is good to use external important rewards as a benchmark of success.

Our communities

Key impacts / After more than 20 years of independence, Namibia still faces huge economic, social and technical challenges. Through the FNB Foundation, we support Government’s national development plan – Vision 2030. Through targeted investments we are trying make a sustainable difference by supporting development initiatives in the selected areas of skills, education and training, community, culture and heritage, SMEs and healthcare.
Key Challenges / Given the limited resources, closely aligning our corporate social investments with the FNB group strategy and the national development will remain an ongoing challenge.
Key Achievements / Through the FNB Foundation we spent N$xx on corporate social responsibility initiatives and supported Namibian sport through sponsorships totaling N$xx. The FNB Foundation extended its partnership arrangements with a number of similar entities that allowed a wider reach for projects.
Key future priorities / Our key future priority is to have a focused approach to corporate social investments that will leave an enduring result in the focus areas we selected. We will continue to seek smart partnerships with likeminded investors. Staff involvement in community support activities will be further enhanced.

The FNB corporate social responsibility initiatives are spearheaded by the FNB Foundation.

FNB made a concerted effort to support development and empowerment in Namibia: at different levels of society and in different parts of the country. The FNB Foundation has a mandate to supporting selected sectors, with a strong focus on community development, education and various areas of skills development. It supports national project, schools, communities, cultural and other projects, empowering Namibians in development. FNB also encourages its staff to become involved in volunteering their services in local projects across the country.

During the year under review, the FNB Foundation looked in-depth into the development of corporate social responsibility programmes in Namibia, and continued to discuss the direction of its own programmes. It reaffirmed its commitment to contributing to social transformation and social justice, to building stable and empowered communities, and to an enhanced skills pool.

Overview of major project supported for 2009/2010

Motor Vehicle Accident Fund