CHAMWE KAIRA
GCR Ratings (GCR) has affirmed Bank Windhoek Limited’s Namibian long and short-term national scale issuer ratings AA(NA)/ A1+(NA) respectively, GCR has announced.
At the same time, the South African long-term issuer rating has been affirmed at A(ZA). The rating outlooks remain stable.
GCR has also confirmed Capricorn Group Limited’s Namibian long- and short-term national scale issuer ratings AA-(NA)/A1+(NA), respectively, with a stable outlook.
The ratings of Bank Windhoek Limited reflect the strengths and weaknesses of Capricorn Group Limited.
The group views the bank as its core operating subsidiary, accounting for a larger portion of its total assets and earnings.
As such, the ratings of the bank are equalised to the group’s Anchor Credit Evaluator (ACE).
GCR said the ratings reflect the group’s market-leading position in Namibia’s banking industry via Bank Windhoek’s demonstrably conservative risk profile and a stable funding and liquidity structure.
Bank Windhoek’s net profit after tax grew 14.4% to N$1.25 billion in the financial year ended 30 June
2024 (2023: N$1.09 billion). The bank enjoyed significant growth across all its key segments, particularly Selekt Platinum, Capricorn Private Wealth and SME.
The Corporate Institutional Banking (CIB) team also secured important deals in the mining and retail sectors.
The bank’s capital and liquidity positions remain sound, with liquidity ratios well above regulatory requirements.
The bank has continued to grow local cheap funding sources, including current and savings deposits, while not increasing foreign funding sources.
Capricorn is diversified, with profit largely split between Namibia (80%) and Botswana (10%) via Botswana-based Bank Gaborone (BG), Capricorn Asset Management (CAM), Peo Finance and Entrepo.
Namibian associates Paratus, Sanlam, and Santam provide further diversification.
Bank Windhoek generates the majority of the profit at 66% of the 2024 consolidated group.
GCR said the group is bolstered by Capricorn Asset Management (CAM)’s leading position as the largest asset manager in Namibia with N$46.6 billion of AUM and Bank Gaborone’s defensive deposit market share of 6.9% as of May 2024.
“The funding and liquidity structure is adequate. Overall, funding increased by 10.9%, largely due to an increase in local funding sources, such as deposits. The Group balances short-term maturities (43.4%) with longer-term maturities (11.2%) of wholesale funding to allow for sustainable liquidity and manage funding costs. However, the cost of funding increased to 6.4% (June 2023: 5.6%) due to the ripple effects of the interest rate hike during the 2023 period from a 2022 low of 3.7%. In line with regional peers, non-bank financial institutions are large depositors in the Namibian banking system, with the top 20 representing 38% of total deposits.,” GCR said.
