Africa-Press – Namibia. AT the end of March, shareholders of the listed Capricorn Group Limited will be paid a 39 cents per share interim dividend, as the company released facelifted financial accounts for the six months ending 31 December 2022.
Common metrics such as net interest income, impairment charges, non-interest income, income from investee companies, loan book and capital adequacy, all returned positive growth when compared to the 2021 accounts.
The group released its interim financial statements yesterday, after hinting over two weeks ago that the announced high interest rates have enabled them to make way more money for the six months ending December 2022, earning at least N$3,7 million per day.
Profit after tax for the group came in strong at N$698 million, a 20,3% increase compared to N$580 million earned at the end of December 2021.
This translates to N$116 million per month and was earned from an asset base of N$60 billion – making Capricorn Group Limited the biggest bank-backed financial institution in the country.
Such an asset base is even bigger than its regulators Bank of Namibia – whose asset base is at N$57 billion over the comparable period.
Though big, the group’s asset quality remained just a percentage point below industry average, with non-performing loans (NPLs) decreased to N$2,38 billion as the group continues to manage credit risk.
The NPL ratio decreased from 5,8% to 5,3% over the six months ended 31 December 2022.
According to management commentary, the better performance is due to a better operating environment, with both Bank Windhoek and Bank Gaborone reporting a marked improvement in their results compared to the prior Covid-19 affected period.
Net interest income increased by 14,9% year-on-year (y/y) to N$1,3 billion, aided by y/y increases in the repo rate in Namibia and Botswana of 300 basis points and 151 basis points, respectively.
The company said Bank Windhoek managed its cost of funding effectively which resulted in a 54 basis point improvement in the net interest margin to 4,88%. However, Bank Gaborone’s net interest margin declined from 3,5% to 3,1% due to a sharp increase in the cost of funding in a market with low levels of liquidity.
Non-interest income which includes banking charges and other fees, saw the group record a whopping 12,3% to N$939 million, mainly attributable to a 23,3% increase in transaction-based fees.
These were driven up by increased transaction volumes specifically through the use of digital channels, particularly EasyWallet, digital fund transfers, ATM withdrawals and point-of-sale transactions, said the group.
Asset management fees from Capricorn Asset Management increased by 11,3% y/y in line with expectations.
Not all was good, as operating expenses increased at a faster rate than both net interest income and non-interest income at 16,1% to N$1,1 billion over the six months.
This has pushed the cost to income ratio above 50% – meaning for every dollar the banking group makes, at least 50,1 cents will pay for costs.
Regardless, capital adequacy edged up to 16,6%, most likely due to low credit uptake in the economy.
The group, however, managed to grow its biggest asset, the loan book, to N$43 billion – matched against a deposit funding of N$44 billion.
The equity base remains reasonable at N$7,7 billion and a reduced borrowings balance of N$5,6 billion.
On the horizon, all anticipation is for further economic recovery and improved economic conditions in the regions where they operate, said the group’s directors.
“The significant pressures from high inflation and high interest rates will continue to have a negative impact for the foreseeable future. Maintaining stability and ensuring the success of the Capricorn Group for all stakeholders remains the group’s top priority,” read the commentary.
The interim financial accounts are available on the company’s website.
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