Africa-Press – Namibia. LISTED and Bank Windhoek owner Capricorn Group Limited has made an interim profit of N$580 million for the six months ending 31 December 2021.
To this effect, the group is declaring a 32 cents per share dividend. This interim dividend per share for the period under review is 45,5% higher than the final dividend per share of 22 cents declared in February 2021.
According to the financials released late last week, the profit earned from continuing operations increased by N$111,4 million (23,8%) compared to 2020, though still below pre-Covid profit of N$580,5 million.
The interim profit pre-Covid-19 was at N$587,8 million. The company said the increased economic activity, albeit from a low base, had a positive impact on the performance of the group in 2021.
“Our interim results reflect a slightly improved operating environment. We were able to preserve and grow value despite the economic and social shock brought about by Covid-19, based on the diversified nature of the group,” said Thinus Prinsloo, the group chief executive.
The group’s operating income for the six months was at N$1,7 billion. With net interest income leading at N$1,1 billion, non-interest income was N$836 million. All these are increases when compared to the 2020 interims.
The company said net interest income increased by 4,9% year-on-year, mainly attributable to an improvement of 50 basis points (bps) in the net interest margins of Bank Windhoek as a result of an effective funding repricing.
Non-interest income increased by N$130,1 million (18,4%) largely due to an increase in net trading income of N$69,7 million (180,2%), mainly from foreign exchange trades and derivatives.
Transaction-based fee income increased by N$42,9 million (8,6%), driven mainly by increased transaction volumes on the back of improved economic activity.
Furthermore, the group said its non-interest income was well supported by its diversified revenue streams with net insurance income and asset management fee income increasing by N$11 million (20,9%) and N$3,9 million (5,1%), respectively.
Impairment charges decreased by 21,6% year-on-year to N$182 million, mainly attributable to the improved operating environment positively impacting the key credit risk indicators of the banks, resulting in lower provisions required than in 2020.
The group’s gross loans and advances increased by 3,6% to N$43,7 billion during the six months ended 31 December 2021 – Bank Windhoek’s growth was at 2,6%, while Bank Gaborone increased its loan book by 2,8%.
Bad apples are, however, tainting the group, as non-performing loans increased by 4,5% since June last year to N$2,57 billion. The group is, however, in a fairly strong capital position and remains well capitalised with a total risk-based capital adequacy ratio of 15,1%. According to the group’s chief executive, while economies are recovering, the focus will be sustainability.
“Following modest economic growth in Namibia and Botswana in 2021, Capricorn expects further economic recovery as Covid-19 restrictions are relaxed and the global pandemic inches closer to endemic status. Thus, the outlook is for improved economic conditions both in Namibia and Botswana, albeit from a lower base. As we embark on the future, the stability and sustainability of the group for the benefit of all stakeholders remain our key priority,” said Prinsloo.
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