The Capricorn Group says it has repositioned its loss-making Zambian unit, Cavmont Bank to focus primarily on servicing the neighboring country’s SMEs sector as part of its turnaround efforts.
The shift from the retail and business banking is expected to aid the banking concern, which has struggled to turn profitable in Zambia’s highly competitive financial services sector.
“The restructure follows a strategic shift away from predominantly retail customers to business banking, repositioning Cavmont Bank to focus particularly on SMEs – a targeted fit with our service and relationship strengths,” Capricorn Group Chairperson, Johan Swanepoel told the Windhoek Observer.
He said the banking concern has also closed an undisclosed number of branches in Zambia as part of efforts to bring the bank back to profitability.
“In July 2019 we introduced significant changes to our business model in Zambia following the development of a turnaround plan aimed at optimizing the performance of the Bank to ensure its long-term sustainability. The turnaround plan included branch rationalization and the streamlining of head office support functions,” Swanepoel said.
“Capricorn Group is confident that the turnaround strategy will bear fruits in the short to medium term, repositioning Cavmont Bank as a more agile, competitive, customer-focused financial service provider that delivers the required shareholders return.”
This comes as the banking concern recorded a loss after tax of N$19.8 million, compared to the loss after tax of N$46.6 million for the period ending 30 June 2018.
“Capricorn Group is satisfied that notwithstanding an increasingly difficult operating environment in Zambia, Cavmont Bank significantly reduced losses during the past financial year,” Capricorn Group Chairperson.
Quizzed on the marginal decline in the Zambian bank’s total assets, he said “Total assets in the “other” operating segment as disclosed in our condensed consolidated financial statements, which includes the Zambian operations has reduced mainly as a result of the deterioration in the Zambian exchange rate. In Kwacha terms, total assets for the Zambian operations increased by 7.5 percent year-on-year, however due to a deterioration of the Kwacha against the Namibian Dollar from K1.37 for N$1 on 30 June 2018 to K1.09 for N$1 on 30 June 2019 caused a decline in the total asset value when expressed in Namibian Dollars.”
With assets of over N$2.4 billion, Cavmont Bank is the smallest among the groups banking units made up of its flagship Namibian unit, Bank Windhoek and Bank Gaborone in Botswana.
CIG is a 97.9 shareholder in Capricorn Capital Holdings Zambia PLC, which owns 100 percent of Cavmont Bank Ltd (CB), an interest it acquired in 2017 for close to N$430 million.
Cavmont Bank Limited was established in 2004, following a merger between Cavmont Merchant Bank Limited and New Capital Bank Plc, and has a network of 17 branches and 3 agencies in 6 of the 10 provinces in Zambia.
CIG has interests in banking, insurance, asset management and microfinance in Namibia, Botswana and Zambia.
Bank Windhoek – Namibia's largest locally owned bank and the second largest commercial bank in the country.
Capricorn Investment Group holds a 65 percent stake in Bank Gaborone which has been in operation for the past 12 years.
In a statement released on the Namibia Stock Exchange last week, the Capricorn Group announced that it had recorded a profit after tax for the year coming at N$1,015 million up from N$934 million a year before.