WINDHOEK – The Capricorn Investment Group Limited (Capricorn Group) released its consolidated group financial results for the year ended June 30, 2019 on Friday, showing excellent results, with group profit after tax for the year ended of N$1.015 billion, up from N$934.4 million at June 2018.
Capricorn Group CEO Thinus Prinsloo stated that considering the context of the operating environment and its impacts, he is particularly proud to share the highlights of the group’s financial results. “These results indicate that, despite demanding circumstances, including the economies being under severe pressure, Capricorn Group has stood firm against the storms and made a noteworthy impact,” said Prinsloo.
He added that Bank Windhoek, Capricorn Asset Management and Entrepo Holdings’ performances exceeded expectations, while Bank Gaborone performed in line with its targets for growth and profitability. Cavmont Bank showed improvement compared to the prior year with a significantly reduced operating loss compared to the previous year.
Jaco Esterhuyse, Capricorn Group financial director, said that earnings attributable to shareholders (excluding exceptional items in the prior year) increased by 15.3 percent year-on-year.
The group increased net interest income with 17.3 percent, mainly contributed by Entrepo and good margin improvement resulting from lower cost of funding and effective liquidity management in Bank Windhoek. Non-interest income, excluding the profit on 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.
This 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.
Also, asset management income increased by 11.3 percent to N$118.2 million (2018: N$105.8 million).
Meanwhile, sharp declines in investment income and challenging market conditions for underwriters resulted in income from associates reducing by 12.7 percent compared to the previous year.
Operating expenses increased 14.3 percent year-on-year. The increase is mainly due to growth in staff costs of 15.6 percent which is largely due to 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.
Excluding these items mentioned above, cost only increased by 2.0 percent which is well below inflation and evidencing the prudent cost control applied during the year.
Gross loans and advances increased in line with private sector credit extension by 6.5 percent to N$39.0 billion. N$2.2 billion of this increase is accounted for by commercial loans in Bank Windhoek and Bank Gaborone.
Total funding increased by 9.0 percent to N$43.9 billion. The increase is attributable mainly to growth in NCDs in Bank Windhoek and term deposits in Bank Gaborone. This growth trend was largely driven by market appetite. ·
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 for the year ended 30 June 2019 (June 2018: 60 cents per share). Dividends will be paid on 27 September 2019 to shareholders.
“Our previous chairman, Koos Brandt, said a bank should be there for customers in the good and bad times. Building on this philosophy, we have supported our customers in the past financial year during sometimes very difficult circumstances, and we can now see the positive impact it had. We anticipate the tough conditions to persist, amplified by economic challenges and the widespread impact of the drought, resulting in consumers, including our customers, remaining under pressure and in need of innovative solutions that will address their unique challenges. This calls for finding ways to mitigate risk for all,” said Prinsloo.
“We will continue to execute on our strategic choices and keep our focus on operational excellence, thus consequently creating value and contributing to positive change for all our shareholders and stakeholders,” Prinsloo concluded.