The Capricorn Group announced Thursday that its profit after tax had surpassed the N$1 billion mark for the first time during the year ended 30 June 2019.
In a statement released on the Namibia Stock Exchange, the Capricorn Group which owns cash cow Bank Windhoek among others, and has operations in two other African countries, announced that it had delivered very good results, with group profit after tax for the year coming at N$1,015 million up from N$934 million a year before.
The results were achieved despite a depressed economic environment in the countries that the group operates.
Bank Windhoek, Capricorn Asset Management and Entrepo Holdings´ performances exceeded expectations, while Bank Gaborone performed in line with its targets for growth and profitability, the group said.
The Zambian unit, Cavmont Bank, which has struggled to make a profit over the years, showed improvement compared to the prior year with a significantly reduced operating loss.
The group increased net interest income with 17.3 percent mainly attributed to Entrepo and good margin improvement resulting from the lower cost of funding and effective liquidity management at Bank Windhoek.
The group acquired a controlling interest in Entrepo last year. Entrepo specialises in micro-lending, life insurance, and income protection business in Namibia.
“Entrepo has an attractive share of the government employee market and complements Bank Windhoek’s micro-lending activities through subsidiary BW Finance, which focuses mainly on union members. The group expects Entrepo to contribute around 15 percent of the group’s profit after tax in the future,” the group said last year following the acquisition.
Non-interest income, excluding the profit on the sale of Visa shares of N$77.3 million and N$38.8 million gain-on-bargain purchase of Entrepo, grew by 22.6 percent to N$1.36 billion.
The growth is mainly due to strong forex trading income across the three banks, strong consistent income from electronic channels in Bank Windhoek, transaction fee income growth in Bank Gaborone as well as income from underwriting activities contributed by Entrepo for the first time.
Asset management income also grew by 11.3 percent to N$118.2 million up from N$105.8 million in 2018.
Operating expenses increased by 14.3 percent year-on-year mainly due to growth in staff costs of 15.6 percent which is largely driven by the inclusion of Entrepo, building capacity in Capricorn Private Wealth, the IT function and provision for performance bonuses and operational banking expenses growth of 18.6 percent as a result of increased transaction volumes.
Gross loans and advances increased by 6.5 percent to N$39 billion.
A final dividend of 36 cents per ordinary share was declared on 20 August 2019 for the year ended 30 June 2019.
Taking into account the interim dividend of 30 cents per share, this represents a total dividend of 66 cents per ordinary share compared to 60 cents per share in the prior year.
Going forward, the group anticipates difficult conditions to persist, amplified by economic challenges and the widespread impact of the drought.
“This calls for enhanced engagement with our clients on all aspects of their financial needs and finding ways to mitigate risk for all. Building on the speed of execution and adaptability that we ingrained in the business this year, we will exploit opportunities and further improve our offerings,” the bank said.
“We are positive that the group will remain resilient and continue to deliver positive results. By delivering on our strategy, diversifying investment and keeping our focus on operational excellence, we will be able to continue creating value and contributing to positive change.”