…as Botswana economic conditions weigh on group
Capricorn Group’s profit after tax declined by 6.4% to N$1.87 billion for the year ended 30 June 2026, as weaker economic conditions in Botswana drove up credit impairments and weighed on loan demand.
The financial services group said credit impairment charges increased by 45% to N$457 million from N$315 million in 2025, becoming the main factor affecting earnings during the period.
The increase was largely concentrated in Botswana, where weaker economic conditions placed pressure on customers, as well as in a limited number of significant client exposures experiencing financial stress.
Gross loans and advances declined to N$51.5 billion from N$52.5 billion in 2025, reflecting softer loan demand in Botswana and lower loan uptake at Entrepo following the discontinuation of the automated Payroll Deduction Management System.
The weaker performance resulted in basic earnings per share declining by 6.4% to 343.7 cents, while return on equity fell to 15.6% from 18.2% in 2025.
Net interest income declined by 1.9% to N$3.33 billion amid higher funding costs and a lower interest rate environment.
However, growth in non-interest income helped cushion the impact on earnings, rising by 8.3% to N$2.62 billion, supported by transactional income, trading revenue and asset management fees.
Non-interest income accounted for 47.7% of operating income, exceeding Capricorn Group’s target of 45%.
Operating expenses increased by 7.6% to N$3.27 billion as the group continued investing in technology, critical skills, operational efficiency and customer experience. The cost-to-income ratio consequently increased to 52.0% from 49.5% a year earlier.
Despite pressure on profitability, Capricorn Group strengthened its balance sheet, with total assets growing by 3.9% to N$75.3 billion and deposits increasing by 6.3% to N$56.22 billion.
Liquid assets rose by 18.9% to N$22.1 billion, while the consolidated loan-to-funding ratio improved to 83.6% from 88.8%.
The group’s total risk-based capital adequacy ratio increased to 19.4% from 18.1%, remaining above the regulatory minimum of 12.5%. Net asset value per share increased by 6.7% to 2,277 cents.
Capricorn Group Chief Executive Officer David Nuyoma said the group had strengthened its financial position despite the challenging operating environment.
“Our 2026 performance demonstrates the resilience of our diversified business model, the quality of our people and the strength of our financial foundation. In a challenging operating environment, we strengthened our balance sheet, invested in future capabilities and continued to create meaningful value for our stakeholders,” he said.
The group said it created N$5.8 billion in value for stakeholders during the year, including N$1.4 billion for employees, N$1.3 billion for suppliers and N$1.3 billion in direct and indirect taxes.
A further N$857 million went to shareholders, N$29.7 million was invested in communities and N$868 million was retained to support future growth.
Capricorn Group maintained its total ordinary dividend at 135 cents per share, comprising an interim dividend of 58 cents and a final dividend of 77 cents. No special dividend was declared for 2026.
Looking ahead, the group said Namibia’s emerging oil and gas sector, renewable energy developments and other growth sectors present long-term opportunities, although geopolitical uncertainty and uneven economic conditions are expected to continue affecting its operating environment.
