Investment case

Why invest in Capricorn Group?

As the leading Namibian-owned financial services group listed on the Namibian Stock Exchange (NSX), Capricorn Group is uniquely positioned to take advantage of future growth opportunities in the southern African region and to invest in businesses that complement our current portfolio.

Our regional advantage

Our diversified portfolio advantage

With operations in Namibia, Botswana, Zambia and South Africa, Capricorn Group has a regionally diversified revenue stream that provides attractive and sustainable returns for shareholders. The group’s diversified regional presence reduces concentration risk and provides a pool of regional skills and expertise to share.

Capricorn Group has a steady record of new product and service launches, and continues to explore opportunities for growth in new sectors beyond our interests in banking, asset management, insurance and finance. In 2018 the group invested in Nimbus, a telecommunication and technology investment company listed on the NSX. This positions the group well to benefit from the convergence between telecommunications and financial services combined with strong growth in demand for data services.

The group delivered operating profit growth of 26% in 2019, and a compound annual dividend growth rate of 8.4% over the past five years.

Our key focus remains the customer and the needs of the customer. Therefore, we are investing in digital offerings and channels that will empower our customers without losing the personal touch and customer intimacy we are known for. We anticipate the rise of smaller, value-adding entities that are digitally enabled and technology driven, with quick and fast business processes to satisfy client needs. By applying an Agile methodology to our platform strategies, we ensure that the group is well positioned for this future. We continue to scan the environment to stay abreast of the latest technology and business models to seize leapfrog opportunities towards augmenting our existing business and help transform it digitally.

A combination of strengths

Our scale and reputation

Bank Windhoek, the group’s flagship brand, is the largest locally owned bank and the second largest commercial bank in Namibia. Bank Windhoek’s scale is evident from its network of 54 branches and agencies, 130 automated teller machines (ATMs) and 248 Cash Express ATMs in Namibia.

Bank Windhoek was recognised internationally when it received the Green Bonds Pioneer Award from Climate Bonds this year. It was the first commercial bank in southern Africa to issue a green bond.

Notwithstanding the challenging environment, Bank Windhoek delivered excellent results during the year under review with a 10.6% growth in operating income excluding exceptional items, and contributing 69% to the group’s profits.

The Capricorn Unit Trust Management Company (CUTM), administered by Capricorn Asset Management (CAM), has been the market leader in Namibia since 2004 in terms of assets under management in the unit trust sphere. CUTM’s latest market share is approximately 31% with 13 unit trusts covering all major asset classes.

Bank Gaborone is on a growth trajectory in Botswana with a proven capability to regularly launch new products and services leading to significant new customer sales.

Entrepo, which has an attractive share of the government employee market, is expanding by using a distinct and highly competitive capability to approve and disburse loans with speed and effectiveness, resulting in high levels of customer satisfaction.

Capricorn Group is widely recognised for our lasting contributions to communities through social responsibility initiatives such as the Bank Windhoek Cancer Apple project. This initiative was selected by the 2018 World Cancer Congress as one of their global innovative projects of hope.

Stability and reliability

Capricorn Group’s two shareholders of reference ensure stability, liquidity and access to capital. They are the GIPF, the largest institutional investor in Namibia with a net asset value of approximately N$117 billion, and Capricorn Investment Holdings (CIH), the founding holding company of Bank Windhoek, established in 1982, with a net asset value of N$5.6 billion as at 30 June 2019.

Capricorn Group has a credit rating of AA and A1+ in the long term and short term respectively with a stable outlook.

The group remains well capitalised with a significant buffer above the minimum capital requirements. This is further supported by a strong governance culture, entrepreneurial spirit and commitment to transparency. We have demonstrated consistent delivery on our AsOne2020 strategy since 2017.

A shared value approach

Since listing on the NSX six years ago, Capricorn Group has created significant value for shareholders, employees, government and strategic partners. The Capricorn Group share price has increased from its public offer price of N$8.75 at listing in June 2013 to N$16.00 on 30 June 2019, thereby achieving a compound annual growth rate of 10.6% – great value given economic challenges over this period.

Value created includes delivering N$24,922,380.60 of dividends to empowerment beneficiaries through Nam-mic Financial Services Holdings (NFSH) since 2013.

The group distributed 10.4% of direct economic value generated in 2019 – at a total value of N$624.8 million – to government in the form of taxes, levies and duties.

An ethical culture

Capricorn Group has a shared culture defined by The Capricorn Way. Ethical decision-making is demonstrated by the board and entrenched through our board evaluation and performance management process. The group has a zero tolerance towards non-compliance with any regulations or legislation in the jurisdictions in which it operates.

“Capricorn is locally run and managed and has undertaken a number of transactions in recent months giving it exposure to lending for strong short-term (cash) earnings growth, as well as ICT – a longer term strategic sector providing complementary services. Moreover, they have diversified into other countries on the continent with Cavmont Bank and Bank Gaborone, thus providing some revenue stream diversification. As far as locally listed companies go, Capricorn Group is one of, if not the, most dynamic, and is thus better positioned to weather the economic storm than most if not all of her peers.” – Cirrus Capital, Namibia

“Capricorn Group has, in our view, the best treasury team in Namibia with a strong track record of managing liquidity and funding through challenging times. Capricorn Group also has, in our view, one of the most stringent credit processes of all the local banks, thus reasonably well placed for both challenging economic conditions and IFRS 9.” – Cirrus Capital, Namibia

“We believe CGP has a sustainable competitive advantage considering the robust long-term earnings growth and their growing market share and business diversification.” – PSG Namibia

“The Capricorn Group is committed to growth and has an innovative approach to doing business. Results from the Namibian operations have been impressive as strong growth in the corporate banking division and a push to drive down funding costs have been driving the bottom line. The resilience of the Group’s financial results in trying times is a testament to the strong and focused management, and we expect this resilience and innovation to continue.” – IJG, Namibia

We believe that through our vision of being the most trusted and inspiring Connector of Positive Change through a highly relevant, convenient and responsive omni-channel network, we will be a catalyst of sustainable opportunities for all our stakeholders.