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

The results were released last week.

According to an analysis released by Simonis Storm Securities, this is an increase of 14,8% year-on-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 operations are primarily focused on banking, insurance, wealth and asset management and microfinance.

According to the analysis, net interest income rose by 3,3% year-on-year to N$2,25 billion, with non-interest revenue rising by 3,6% year-on-year to N$1,47 billion.

Impairment charge rose by 45,8% year-on-year, to N$443,7 million.

The group's operating expenditure rose by 5,1% year-on-year to N$1,99 billion while the cost-to-income ratio rose by 0,8 percentage points year-on-year to 53,5%.

The group's gross loans and advances increased by 2,7% during the year under review (rising 2,4% after a restatement of its 2020 annual results) to N$42,1 billion while deposits grew by 2,2% to N$40,1 billion. A loan-to-deposit ratio of 86,9% was recorded, compared to 87,3% for the 2020 financial year.

A final dividend of 38 cents per share was declared on 14 September, with the payment date scheduled on 22 October. This brings dividends during the 2021 financial year to 60 cents per share, which is a yield of 4,7% (financial year 2020: 3,8%) with a 35% pay-out ratio.

Simonis Storm Securities noted that although they grossly underestimated the credit impairment charge, Capricorn Group had recorded a larger hit than that of its peers (1,8 times the equivalent figure reported by First National Bank of Namibia, and 3,6 times the equivalent figure reported by Standard Bank Namibia), meaning the group was possibly exposed to a bigger risk.

Net interest income (loans and advances) performance surprised to the upside, Simonis Storm commented.

Capricorn Group associates boosted its bottom line, making up 7,4% of profit before tax, and revealing some diversification benefits including reduced risk.

The group also announced that it is planning to launch a micro-lending business and structured trade finance initiative in Botswana next year.

In the final analysis, Simonis Storm said it believed this was a good set of results given the macro-economic backdrop, Covid-19 waves and lockdown restriction measures.

Copyright The Namibian. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English