Capricorn Group delivered a strong financial performance in its interim financial results for the six months ended 31 December 2024.

 The figures, released yesterday, show that Capricorn›s profit after tax increased by 28.4% to N$1.06 billion, compared to N$827.6 million during the same period last year. 

This translates to a 29.1% rise in earnings per share to 196.80 cents, while the annualised return on equity also improved from 16.8% to 19.1%.

“The group’s gratifying performance is due to excellent results and solid all-round performances by our subsidiaries, Bank Windhoek, Bank Gaborone, Capricorn Asset Management (CAM), Entrepo and Peo Finance, as well as our associates,” said David Nuyoma, Group CEO.

Capricorn Group stated that it experienced good momentum in growth despite a difficult, albeit improving, operating environment. 

Operating profit for the half year increased by 27.0%, compared to the same period the year before, driven by improved net interest margins, strong growth in non-interest income and lower impairment charges.

“Our outlook for Namibia’s economy is promising, with an expected growth of 4% in 2025, driven by a resurgence in primary industries and continued positive performance in secondary sectors like manufacturing, electricity and water. Namibia is well-positioned with a favourable economic trajectory, lower interest rates, sectoral growth drivers, and currency stability. Similarly, Botswana’s gross domestic product is anticipated to grow between 3% and 4% in 2025, recovering from the 2024 contraction due to the global diamond market slump. 

These regional economic developments should help Capricorn Group achieve sustained growth, benefitting all our stakeholders,” Nuyoma noted.

Capricorn Group’s positive financial performance over the past six months enabled value creation for all stakeholders, contributing to the socio-economic development of Namibia and Botswana, and positively impacting many lives, including our employees, suppliers, shareholders, communities and government.

Capricorn Group is a Namibian financial services group listed on the Namibian Stock Exchange. It has diversified operations and business interests in Namibia and Botswana.

The Group created a value of N$2.9 billion during the six months ended 31 December 2024, which was shared by its primary stakeholders. 

This includes employees (N$690 million), government and regulators (N$656 million), ordinary shareholders (N$321 million), suppliers (N$562 million), communities (N$21.2 million) as well as value retained for future expansion (N$645 million). 

Performance highlights

Net interest income increased by 12.7% year-on-year, attributable to a 5.7% increase in gross loans and advances and effective cost of funding management. 

Despite a 75-basis-point cut in the Namibian repo rate over the period, Bank Windhoek’s net interest margin improved to 5.28% from 5.11%, while Bank Gaborone’s margin increased to 4.39% from 4.07% year-on-year.

Asset quality remains a top priority for the group. 

Impairment charges decreased by 25.7% year-on-year due to better credit risk indicators, following a 75 basis-point reduction in the Namibian repo rate and a proactive approach to credit risk management. 

Non-performing loans decreased by 0.6% to N$2.39 billion, resulting in a lower % NPL ratio of 4.6% (June 2024: 4.7%). The Group continues to maintain prudent provisions for expected credit losses. 

Non-interest income increased by N$179 million (16.1%) due to increased transaction and trading volumes. 

Transaction-based fee income increased by 13.6%, while net trading income increased by 16.3%. 

Assets under management increased to N$52.2 billion (June 2024: N$46.6 billion), increasing asset management fees from 19.2% to N$122 million for the period under review.

Operating expenses increased by 12.1% (N$161 million) year-on-year, including an increase of N$27 million (16.4%) in variable operational banking expenses, directly linked to increased transaction and trading volumes. 

Excluding these operational banking expenses, an overall expense growth of 11.5% (N$133 million) is reported. 

This is largely due to increased staff costs (N$114.2 million (8.6%) and information communication expenses. 

Increased staff costs were primarily driven by annual salary adjustments and the filling of key vacancies, particularly in information technology resources.

Information technology expenses increased above inflation due to the weaker Namibian dollar and significant increases in license fees.

Capricorn retained its healthy liquidity position during the period ended 31 December 2024, with liquid assets increasing by 11.5% (N$1.8 billion) year-on-year. 

Liquid assets exceeded Namibia and Botswana’s minimum regulatory liquid asset requirements by 163% and 92%, respectively.

Gross loans and advances increased by N$1.18 billion since 30 June 2024, mainly driven by growth in term loans of N$583 million and instalment finance of N$403 million. 

Overdrafts and mortgage loans increased by N$99 million and N$100 million, respectively.

The Group’s capital position remains robust, with a total risk-based capital adequacy ratio of 18.1% as at 31 December 2024 (June 2024: 17.9%).

The Group declared an interim dividend of 61 cents per ordinary share, a 27.1% increase from the interim dividend per share of 48 cents declared in the comparative period. 

The Group considered its capital and liquidity position when declaring an interim dividend that balances prudency and future growth capacity with a fair dividend yield for investors.