Contributes P4.8 billion in gross loans
But Pula deterioration reduced loans by 4.7%
COVID-19 pandemic overwhelms group
Bank Gaborone has contributed immensely to revenues of its parent company, Capricorn Group increasing gross loans and advances by 2.3% to P4.8 billion during six months ended 31 December 2020.
The group says due to a deterioration of the Botswana Pula, its loans and advances decreased by 4.7% in Namibia Dollar terms with Group, adding that the Entrepo’s book loan grew by 10.6%.
Bank Gaborone, a wholly-owned subsidiary of Capricorn Group, also contributed very significantly towards financial performance of the Group last year, boosting key aspects of the revenues.
Capricorn Group is a diversified holding company operating in Botswana, Namibia and Zambia. The bank’s non-performing loans increased by 15.3% to P291.2 million as compared to P256.6 million posted in 2019; this therefore showing the resilience of the business in boosting group.
During the period under review, the group says asset quality remained their key focus area.
“However, the challenging economic environment, exacerbated by the impact of the pandemic, has had a negative impact on the Group’s total non-performing loans (NPLs), which increased by 12.7% to N$2.2 billion during the current period. The Group’s NPL ratio increased from 4.7% to 5.2%,” said the Group.
In addition, the well diversified Namibian-based company said due to the significant increase in provision for expected credit losses the NPL coverage ratio increased to 53.2% (December 2019: 44.8%).
The group remains well capitalised with a total risk-based capital adequacy ratio of 14.1%, well above the minimum regulatory capital requirement of 10.0% hence encouraging amid Covid-19. The strong capital position will stand the Group in good stead while also navigating the perfect storm brought about by the COVID-19 economic shock which negatively impacted the business.
“Capricorn Group met the challenges of the COVID-19 pandemic head-on. The agility and quick decision-making within the Group allowed it to quickly sense and respond to ever changing challenges. The Group’s profit from continuing operations decreased by N$118.8 million, (20.2%) relative to the pre-COVID comparable period, “said Group narrating virus ordeal.
During this time, the Group managed to provide financial relief to clients and job security to its employees while implementing strategies to ensure the sustainability of the Capricorn Group.
Group’s non-interest income increased by 3.2% year-on-year, despite the difficult operating environment and impact of COVID-19 preventative measures on its financial activities across its markets.
“The Group declared an interim dividend of 22 cents per ordinary share. The interim dividend per share for the period under review is 10% higher than the final dividend per share of 20 cents declared during September 2020,” said the group, noting that its 2021 economic outlook remains fairly bleak.