Capricorn Group profit falls 6.4%

Capricorn Group, the parent company of Bank Windhoek, reported a 6.4% decline in profit after tax to N$1.87 billion for the year ended 30 June, as weaker economic conditions in Botswana, higher funding costs and increased credit impairments weighed on earnings.Basic earnings per share fell by 6.4% to 343.7 cents, while return on equity declined to 15.6%, from 18.2% a year earlier.The group said credit impairment charges were the main factor affecting its earnings, increasing to N$457 million from N$315 million in 2025.The increase was largely concentrated in Botswana, where economic conditions remained weaker, as well as financial stress involving a limited number of significant client exposures.“Our 2026 performance demonstrates the resilience of our diversified business model, the quality of our people and the strength of our financial foundation,” group chief executive David Nuyoma said.“In a challenging operating environment, we strengthened our balance sheet, invested in future capabilities and continued to create meaningful value for our stakeholders.”Botswana weighs on lendingGross loans and advances declined to N$51.5 billion from N$52.5 billion, reflecting softer loan demand in Botswana and lower loan uptake at Entrepo.The group attributed the latter to the discontinuation of the automated Payroll Deduction Management System.The weaker lending environment came as net interest income fell 1.9% to N$3.33 billion.Capricorn Group's Botswana operations are linked to Bank Gaborone, while Bank Windhoek is the group's principal banking operation in Namibia.Despite the decline in interest income, the group reported stronger growth in non-interest income, which rose 8.3% to N$2.62 billion.Non-interest income accounted for 47.7% of operating income, exceeding the group's 45% target. The increase was supported by transactional income, trading revenue and asset-management fees.The group said the performance reflected progress in diversifying its earnings away from interest-rate-sensitive income.Balance sheet strengthensCapricorn Group's balance sheet strengthened during the year, with total assets increasing 3.9% to N$75.3 billion and deposits rising 6.3% to N$56.22 billion.Liquid assets increased 18.9% to N$22.1 billion, while the consolidated loan-to-funding ratio improved to 83.6%, from 88.8%.The group's total risk-based capital adequacy ratio increased to 19.4%, from 18.1%, and remained well above the regulatory minimum of 12.5%.Net asset value per share increased 6.7% to 2,277 cents.The ordinary dividend was maintained at 135 cents per share.Operating expenses, however, increased 7.6% to N$3.27 billion as the group continued to invest in technology, skills, operational efficiency and customer experience.The cost-to-income ratio consequently increased to 52%, from 49.5%.Despite the weaker annual result, Capricorn Group said profit after tax had grown at a compound annual rate of 13.7% over the past five years.N$5.8bn created for stakeholdersThe group said it created N$5.8 billion in value for stakeholders during the financial year.This included N$1.4 billion for employees, N$1.3 billion for suppliers and N$1.3 billion in direct and indirect taxes.Shareholders received N$857 million, while N$29.7 million was invested in communities.A further N$868 million was retained to support future growth.The group said 86% of its operating expenses were incurred locally.OutlookCapricorn Group said Namibia's emerging oil and gas industry, renewable energy developments and other growth sectors presented long-term opportunities.It cautioned that geopolitical uncertainty and uneven economic conditions would continue to shape the operating environment.Nuyoma said the group had strengthened its balance sheet while continuing to invest in future capabilities.

Capricorn Group profit falls 6.4%

Comments

Namibian Sun 2026-09-21

Please login to leave a comment

Capricorn Group profit falls 6.4%

Comments

Namibian Sun 2026-09-21

Please login to leave a comment

Subscription Required to Access Content ×

Login

Subscription Required to Access Content