Capricorn shows good results – Simonis Storm

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THE Capricorn Group, which includes Bank Windhoek, recorded an after-tax profit of N $ 983 million, according to its audited consolidated results for the year ended June 30, 2021.

The results were released last week.

According to an analysis published by Simonis Storm Securities, this is a 14.8% increase over one year in the group’s after-tax profit.

Capricorn Group is a diversified financial services group based in Windhoek, with subsidiaries in Botswana and Zambia. The group’s activities are mainly focused on banking, insurance, wealth and asset management and microfinance.

According to the analysis, net interest income increased 3.3% year-on-year to N $ 2.25 billion, with non-interest income increasing 3.6% year-on-year to 1.47 billion Namibian dollars.

The impairment charge increased 45.8% year over year to N $ 443.7 million.

The group’s operating expenses increased 5.1% year-on-year to N $ 1.99 billion, while the cost-to-income ratio increased 0.8 percentage point year-on-year to 53. 5%.

The group’s gross loans and advances rose 2.7% in the year under review (up 2.4% after restating its 2020 annual results) to N $ 42.1 billion while deposits rose 2.2% to 40 Namibian dollars, 1 billion. A loan / deposit ratio of 86.9% was recorded, compared to 87.3% for fiscal 2020.

A final dividend of 38 cents per share was declared on September 14, with the payment date set for October 22. This brings the dividends in FY2021 to 60 cents per share, or a yield of 4.7% (FY2020: 3.8%) with a payout ratio of 35%.

Simonis Storm Securities noted that although they greatly underestimated the credit impairment charge, Capricorn Group had taken a bigger hit than its peers (1.8 times the equivalent figure reported by the First National Bank of Namibia, and 3.6 times the equivalent figure reported by Standard Bank Namibia), meaning the group may have been at greater risk.

The performance of net interest income (loans and advances) surprised on the upside, commented Simonis Storm.

The partners of the Capricorn group increased its results, representing 7.4% of the profit before taxes, and revealing certain advantages of diversification, in particular a reduction of risks.

The group also announced that it plans to start a microcredit business and structured trade finance initiative in Botswana next year.

In the final analysis, Simonis Storm said he believes this is a good set of results given the macro backdrop, waves of Covid-19 and the lockdown restriction measures.

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