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Capricorn records N$1.15bn after-tax profit

September 14, 2022 0
Capricorn records N$1.15bn after-tax profit

Listed financial services group, Capricorn Group Limited, which owns Bank Windhoek, says it recorded an after-tax profit of N$1.15 billion for the year ended 30 June 2022. 

“The Group delivered strong results, despite the economic pressures exacerbated by rising inflation on the back of increased global oil and food prices.  Our region, fortunately, witnessed increased economic activity as COVID-19-related restrictions were eased,” said Johan Maass, Capricorn’s Group Chief Financial Officer. 

During the period under review, the group’s net interest income before impairments increased by 3.6% to N$2.34 billion, while Bank Windhoek’s net interest income increased by 7.4% in 2022 thanks to a year-on-year growth of 7.6% in interest earning assets.

 “Notwithstanding repo rate increases of 100 basis points between February and June 2022 by the Bank of Namibia, the bank’s average net interest margin remained relatively flat at 4.37% (as average cost of funding increased over the period.” 

Bank Gaborone experienced a 7.6% decline in net interest income, while interest income grew by 6.6% over the period. 

“The Bank of Botswana increased rates by 51 basis points in April 2022 and 50 basis points in June 2022. Despite these increases, Bank Gaborone experienced a 7.6% decline in net interest income.  While interest income grew by 6.6% in 2022, interest expenses increased 23.2% as Bank Gaborone’s interest margin deteriorated to 2.91% (2021: 3.79%), due to poor market liquidity driving higher cost of funding.” 

The group’s non-interest income increased by 13.1% to N$1.67 billion during the period. 

“Bank Windhoek increased its non-interest income by 10.3% and Bank Gaborone’s non-interest income grew 33.3% to Botswana Pula (BWP) 106.2 million.   

The increases in this revenue line were a direct consequence of increased transaction volumes and an increase in foreign exchange trading income on the back of higher transaction volumes, increased foreign exchange rate volatility and higher trading margins.   

Non-interest income is supported by the Group’s diversified income streams, including a contribution from Capricorn Asset Management (CAM) of asset management fee income of N$164.6 million. Entrepo’s net premium income decreased marginally from N$163.3 million in 2021 to N$161.3 million,” the company said.

Operating expenses for the listed company increased by 6.7% compared to the prior year’s 5.1% increase. 

“Increases in operating expense lines were mostly contained to below the inflation rate.  Notable exceptions were staff cost and operational banking expenses.” 

Capricorn said despite the challenging economic conditions, the group’s non-performing loans decreased marginally to N$2.44 billion from N$2.46 billion prior the year under review. 

“This resulted in the non-performing loan ratio (excluding interest in suspense) decreasing to 4.8% (2021: 5.2%).  Our loan loss rate decreased from 1.07% to 0.85% and remains low against current industry norms.  Impairment charges decreased by 17.2% (N$76.4 million) to N$367.3 million, mainly as a result of our proactive approach to credit risk management and an improved operating environment for our customers as COVID-19 restrictions were eased.” 

Gross loans and advances for the period increased by 6.1% to N$44.7 billion for the period. 

“This growth was mainly attributable to increases in commercial loans, mortgage loans and article finance.” 

All our subsidiaries performed well this financial year, giving the Group a strong foundation to continue growing and expanding its leadership in the various markets,” said Thinus Prinsloo, the Group CEO.   

The group, which has operations in Namibia and Botswana, said it spent N$1.2 billion, a 7.4% increase in addition to remuneration of more than 2,000 employees who receive rewards, recognition and opportunities for career and personal development.

The group declared a final dividend of 40 cents per ordinary share. 

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Last modified on Thursday, 15 September 2022 09:53
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