WINDHOEK – Global Credit Ratings (GCR) has affirmed the national scale ratings assigned to Capricorn Investment Group Limited and Bank Windhoek Limited of AA (NA) and A1+(NA) in the long-term and short-term respectively; with the outlook accorded as stable. Furthermore, Global Credit Ratings has affirmed the long-term South African national scale (Rand) issuer rating of A+(ZA) assigned to Bank Windhoek Limited; with the outlook also accorded as stable.
GCR says it accorded these credit ratings to Capricorn and Bank Windhoek Limited based on the adequate capitalisation, growing earnings, adequate funding and liquidity of the group.
“An adverse economic environment affected the Group’s asset quality and earnings growth potential. Its competitive position is strong, supported by a large market share in an oligopolistic Namibian banking industry with high barriers to entry. The Group is diversified, with a significant presence in the asset management and insurance markets, as well as geographic diversity from operations in Zambia and Botswana, which contribute a combined 16.9 percent to Group consolidated assets,” reads a statement from GCR.
The stable outlook reflects GCR’s assumption that the economic climate is improving and thus the performance of the Group is bound to stabilise with an expectation of growth in earnings and in the long-term an improvement in asset quality.
“The Group has a strong competitive position particularly in Namibia through its subsidiary Bank Windhoek Limited. BW contributes 78.7 percent to Group assets and is the 2nd largest bank in Namibia with a 29.8 percent market share of industry assets. The Group’s substantial market position within the Namibian economy and strong local shareholder base makes it well positioned to take advantage of positive growth and infrastructure/other development within the domestic economy.
Other non-banking subsidiaries and associates (offering asset management, unit trust management products and services, property development and long and short-term insurance) contributed 4.3 percent of consolidated assets and 11.4 percent of pre-tax profits at FY18,” reads the GCR statement.