THE Capricorn Group yesterday released its interim financial results for the six months ended 31 December 2023.
The group achieved solid results with profit after tax, increasing by 18.5% to N$827.6 million, compared to a profit after tax of N$698.2 million that was reported in the comparative period in the prior year.
This represents an increase of 19.4% in earnings per share to 152.4 cents. Annualised return on equity at half year increased from 16.6% to 16.8% 2022.
“The group’s strong performance is attributable to loan book growth and increased transaction volumes, offset to some extent by escalated credit impairment charges,” said Thinus Prinsloo, the outgoing group CEO.
Capricorn Group is a Namibian financial services group listed on the Namibian Stock Exchange with diversified operations and business interests in Namibia and Botswana.
The group’s profit after tax for the period under review represents a year-on-year increase of 7.5%. Similarly, both headline earnings and earnings per share for the same period experienced a year-on-year growth of 7.2%.
According to Prinsloo, Capricorn Group retained a healthy liquidity position as at 31 December 2023 as the group’s liquid assets increased by 10.9% (N$1.56 billion) year-on-year. Liquid assets exceeded minimum regulatory requirements in Namibia and Botswana by 135% and 114%, respectively, as at 31 December 2023.
“Our positive financial performance enabled us to create value 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. The group created value of N$2.42 billion during the six months ended 31 December 2023,” shared Prinsloo.
The value shared by employees was N$563 million, government through taxes N$574 million, ordinary shareholders N$314 million, suppliers N$515 million, communities N$19.8 million, and value retained for future expansion was N$438 million. Capricorn Group experienced a noteworthy 12.0% year-on-year increase in net interest income, driven by higher interest rates, an 8.5% year-on-year growth in the loan book and prudent management of cost of funding.
The lending businesses managed their cost of funding very effectively, leading to a 23-basis point enhancement of the net interest margin to 5.1% for Bank Windhoek, while the net interest margin at Bank Gaborone commendably increased from 3.1% to 4.1%.
Impairment charges increased by N$98.0 million to N$252.8 million year-on-year. The ongoing economic impact of increased inflation rates caused by geopolitical instability combined with higher interest rates continued to pressure key credit risk indicators, with non-performing loans increasing from N$2.46 billion in June 2023 to N$2.66 billion in December 2023. The group continues to hold prudent provisions for expected credit losses.