Capricorn to consolidate before expanding abroad

14 September 2018
The Capricorn Group - the holding company of Bank Windhoek - says it has no immediate plans to invest in other countries in the region outside Namibia, Botswana and Zambia.
In an interview with the Windhoek Observer in Gaborone, Botswana last week, Group Managing Director, Thinus Prinsloo, said considering the current sluggish economy across southern Africa, the group will only make calculated expansion plans.
“This is not the best time to take the leap of faith; it’s going to be more calculated. We don’t see an active pursuit into other countries. It’s really about gaining control of what we have and making sure that the growth is sustainable,” Prinsloo said.
In the financial year ended 30 June 2018, the group’s normalised total comprehensive income decreased by 5.5 percent, compared to the year ended 30 June 2017.
The decrease reflected the challenging economic conditions, but was largely caused by the disappointing results of the Zambian operations.
Prinsloo said as part of measures to make the Zambian operation profitable, the whole top management of its Zambian subsidiary, Covmont Bank, was replaced.
He believes the Zambian bank will take time to build to profitable levels.
“It is long term play,” Prinsloo said.
“The budget (for Covmont) that we have approved for this year is at least break even and they are on budget so far; it looks very positive. The growth potential in Zambia is significant. They have a population of 15 million. We have hardly penetrated that market. If we can get our game right, the growth potential there for us is significant and that is what we are banking on.”
Bank Gaborone, which has been in operation for 12 years, performed fairly well in the financial year ended 30 June.
It contributed six percent to the group’s profit after tax, compared to a four percent contribution in 2017.
Responding to a question on the lessons learned from the Botswana operations, which the group started from scratch, Prinsloo said, “One of the advantages of a green field operation was that chances of succeeding are better because there is control and right management from day one of the operation.
“It’s a lot harder to change management in an existing operation. Second one is about liquidity; you forget the lessons that you learned 20 years ago, when you go to a new operation. Market liquidity is the make or break of any bank.”
He said investing outside Namibia was a ‘brave’ decision, given the different economic and regulatory environments.
“If you look at the other countries in the region, it’s a brave thing to go there; even South Africa is in recession again. The markets are tough everywhere. You really have to make sure that you have the right strategy.”
Prinsloo said the group is proud of its achievements in Botswana although the road has not been easy.
Sybrand Coetzee, the Managing Director of Bank Gaborone, said the advantage of the bank to Namibian companies is that they will have a point of contact, with no need to establish new relationships in Zambia and Botswana
“We can offer that one-stop-shop and a one point of contact that can assist with cross border banking.”
Coetzee sees a lot of potential for Bank Gaborone, especially considering the country wants to diversify its dependence on diamond mining.
“Our focus is on the next layer of industries that will diversify the economy. So this means your tourism and agriculture industries,” he said.
Last week, Bank Gaborone opened a new head office in Gaborone’s central business district, which was opened by Botswana’s Vice President, Slumber Tsogwane.
Speaking during the ceremony, Prinsloo said since listing on the Namibian Stock Exchange five years ago, the group has recorded a 96.9 percent growth in its  share price, a compounded annual growth rate in profit after tax of 13.6 percent, N$1.3 billion paid out in dividends and a 130 percent total return per share.
In the financial year ended 30 June, the group increased its shareholding in Capricorn Investment Holdings Botswana, which is the holding company of Bank Gaborone, with 15.6 percent to 84.3 percent.
The roots of the Capricorn Group dates back to 36 years ago when a group of Namibian entrepreneurs identified the need for a Namibian bank.
Capricorn is a diversified financial services group and its operations are primarily focused on banking, wealth and asset management insurance, and microfinance.


The Windhoek Observer is an English-language weekly newspaper, published in Namibia by Paragon Investment Holding. It is the country's oldest and largest circulating weekly.

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