Capricorn lauds GIPF impact on group

25 August 2017
The Capricorn Group, the holding company of Bank Windhoek, says the balance sheet strength of new shareholder, the Government Institutions Pension Fund (GIPF), will bolster the group, which now has liquid assets valued at N$1 billion.
In May this year, GIPF acquired a 25 percent shareholding in Capricorn Group for N$2 billion.
The GIPF has a total asset value of close to N$100 billion.
“The coming on board of GIPF and the N$1 billion liquid assets will leave the group in a strong position,” Group Managing Director, Thinus Prinsloo, said in an interview this week.
The group, which also operates in Botswana and Zambia, said there are no immediate plans to expand further outside Namibia.
“There are no immediate plans for expansion to other countries. If an opportunity, however, presents itself, it will be considered on its merit,” Prinsloo said.
He said the group expects a balance sheet boost from the expansion of its operations in Botswana and Zambia.
 “However, our outlook remains positive with an expectation that the expansion of the group to Botswana and Zambia will contribute to growth in both our balance sheet as well as profit. Our strong drive towards operational excellence will realise cost savings and improve revenue streams.  The recent enhancements to our service offering will improve our delivery of stakeholder value,” Prinsloo said.
He said the amendment to the Credit Agreements Act, which now requires a 10 percent deposit on car purchases, had not impacted on the banking unit’s operations.
“We were not impacted by the new legislation. Bank Windhoek already applied the requirement before it came into effect.”
When asked when he expects conditions in the market to improve, Prinsloo said it was not easy to tell.
“This is very difficult… but although we expect the economy to remain fairly muted, we remain confident that there will be improvements over the coming year.” Commenting on the financial results for the year ended 30 June, Prinsloo said the Namibian economy experienced one of its biggest challenges since independence, with GDP declining significantly from a 3.3 percent growth during the prior financial year of the group, to a contraction of 1.8 percent during the first three quarters of the group’s current financial year.
He noted that the Namibian banking sector has been significantly impacted by the economic downturn, which resulted in a sharp reduction in private sector credit extension and severe market liquidity constraints.
“As a consequence, banks’ profits came under severe pressure following reduced interest margins due to a substantial increase in cost of funding as the market competed for limited liquid funds.” Bank Windhoek’s non-performing loans as a percentage of gross advances increased only slightly from 1.32 percent to 1.44 percent, despite the tough economic environment.
“This can be attributed to the quality of our loans and prudent credit management practices. This has always been a key focus area of the bank, and given the current economic climate, will remain a key priority.  We believe that our knowledge of the market, local decision-making and relationships with our clients, will ensure that the quality of our advances book is maintained,” Prinsloo said.
The group’s profit after tax grew to N$917 million from N$905 million in 2016.  Operating profit before tax increased by two percent to nearly N$1.2 billion.
On a normalised basis, excluding once-off income from Angolan Kwanza trading in the prior year and the profits of Capricorn Investment Holdings (Botswana) and Cavmont Capital Holdings (Zambia) acquired during the year, operating profit before tax grew by four percent year on year.
A final dividend of 38 cents per ordinary share was declared on 15 August 2017 for the year ended 30 June 2017. Taking into account the interim dividend of 30 cents per share paid in March 2017, this represents a total dividend of 68 cents per ordinary share for the year ended 30 June 2017 (June 2016: 66 cents per share).

 tortise consultancy


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.

Contact Us

Windhoek Observer House
c/o John Meinert & Rossini Street
Windhoek West
Tel: +264 61 411 800
Fax: +264 61 226 098