Capricorn Group reports 28.4% profit surge
Stellar
Financial services intermediary posts strong gains amid improving regional economic outlook
Capricorn Group has announced exceptional financial results for the six months ending December 31, 2024, with profit after tax soaring by 28.4% to N$1.06 billion compared to N$827.6 million during the same period last year. The impressive performance has translated to a 29.1% increase in earnings per share, reaching 196.80 cents.
In a statement released, Capricorn Group CEO David Nuyoma attributed the strong showing to "excellent results and solid all-round performances" by the Group's subsidiaries, including Bank Windhoek, Bank Gaborone, Capricorn Asset Management, Entrepo, and Peo Finance, as well as its associates.
The financial services group reported a 27.0% increase in operating profit for the half-year period, driven by improved net interest margins, robust growth in non-interest income, and lower impairment charges. The Group's annualized return on equity also improved from 16.8% to 19.1%.
"Our outlook for Namibia's economy is promising, with an expected growth of 4% in 2025 driven by a resurgence in primary industries and continued positive performance in secondary sectors like manufacturing, electricity, and water," Nuyoma said.
According to the CEO, Namibia is well-positioned with a favorable economic trajectory supported by lower interest rates, sectoral growth drivers, and currency stability. Similarly, Botswana's GDP is anticipated to grow between 3% and 4% in 2025, recovering from the 2024 contraction caused by the global diamond market slump.
The Group reported a 12.7% year-on-year increase in net interest income, attributed to a 5.7% increase in gross loans and advances and effective cost of funding management. Despite a 75 basis-point reduction in the Namibian repo rate, Bank Windhoek's net interest margin improved to 5.28% from 5.11%, while Bank Gaborone's margin increased to 4.39% from 4.07%.
Impairment charges decreased by 25.7% year-on-year due to better credit risk indicators, while non-performing loans decreased by 0.6% to N$2.39 billion, resulting in a lower NPL ratio of 4.6%, down from 4.7% in June 2024.
Non-interest income rose by N$179 million (16.1%) on increased transaction and trading volumes, with transaction-based fee income up 13.6% and net trading income increasing by 16.3%. Assets under management grew to N$52.2 billion from N$46.6 billion in June 2024, boosting asset management fees by 19.2% to N$122 million.
Operating expenses increased by 12.1% year-on-year, including a 16.4% rise in variable operational banking expenses directly linked to increased transaction volumes.
The Group maintained a healthy liquidity position, with liquid assets increasing by 11.5% year-on-year and exceeding minimum regulatory requirements in Namibia and Botswana by 163% and 92%, respectively. Its capital position remains robust, with a total risk-based capital adequacy ratio of 18.1% as of December 2024.
Following these strong results, Capricorn Group has declared an interim dividend of 61 cents per ordinary share, representing a 27.1% increase from the 48 cents declared in the comparative period last year.
In a statement released, Capricorn Group CEO David Nuyoma attributed the strong showing to "excellent results and solid all-round performances" by the Group's subsidiaries, including Bank Windhoek, Bank Gaborone, Capricorn Asset Management, Entrepo, and Peo Finance, as well as its associates.
The financial services group reported a 27.0% increase in operating profit for the half-year period, driven by improved net interest margins, robust growth in non-interest income, and lower impairment charges. The Group's annualized return on equity also improved from 16.8% to 19.1%.
"Our outlook for Namibia's economy is promising, with an expected growth of 4% in 2025 driven by a resurgence in primary industries and continued positive performance in secondary sectors like manufacturing, electricity, and water," Nuyoma said.
According to the CEO, Namibia is well-positioned with a favorable economic trajectory supported by lower interest rates, sectoral growth drivers, and currency stability. Similarly, Botswana's GDP is anticipated to grow between 3% and 4% in 2025, recovering from the 2024 contraction caused by the global diamond market slump.
The Group reported a 12.7% year-on-year increase in net interest income, attributed to a 5.7% increase in gross loans and advances and effective cost of funding management. Despite a 75 basis-point reduction in the Namibian repo rate, Bank Windhoek's net interest margin improved to 5.28% from 5.11%, while Bank Gaborone's margin increased to 4.39% from 4.07%.
Impairment charges decreased by 25.7% year-on-year due to better credit risk indicators, while non-performing loans decreased by 0.6% to N$2.39 billion, resulting in a lower NPL ratio of 4.6%, down from 4.7% in June 2024.
Non-interest income rose by N$179 million (16.1%) on increased transaction and trading volumes, with transaction-based fee income up 13.6% and net trading income increasing by 16.3%. Assets under management grew to N$52.2 billion from N$46.6 billion in June 2024, boosting asset management fees by 19.2% to N$122 million.
Operating expenses increased by 12.1% year-on-year, including a 16.4% rise in variable operational banking expenses directly linked to increased transaction volumes.
The Group maintained a healthy liquidity position, with liquid assets increasing by 11.5% year-on-year and exceeding minimum regulatory requirements in Namibia and Botswana by 163% and 92%, respectively. Its capital position remains robust, with a total risk-based capital adequacy ratio of 18.1% as of December 2024.
Following these strong results, Capricorn Group has declared an interim dividend of 61 cents per ordinary share, representing a 27.1% increase from the 48 cents declared in the comparative period last year.
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