Page 25 - Capricorn IAR 2020

2020 INTEGRATED ANNUAL REPORT
GROUP CEO’S REPORT
• 2020 was an eventful year that brought new dimensions to our strategic reflection and planning processes
• Operational performance showed resilience and sustainability under guidance from a leadership team that embraced change and lived The Capricorn Way
• Capricorn Group made a significant contribution to support governments and vulnerable communities during the COVID-19 pandemic
• The short term outlook for the Group is challenging, however, we will continue making priority investments in data and digitisation to enhance the client experience
An eventful year
We started the 2020 financial year with confidence: the Group delivered good results in the previous year, and we were on track
to deliver more positive growth. At the end of December 2019,
we reported solid half year results, despite continuing difficult economic conditions in all the operating regions. This bore testimony to the resilience of the Group.
We were in the process of defining our new strategic choices for the AsOne2023 strategy, and were attuned to the political, economic, social, technological and environmental risks shaping the next three years.
Three months later, the world was gripped by a challenge that would severely test the resilience of our societies, communities and families. Namibia was already in a precarious position economically and was forced to confront the reality of extensive corruption in the fishing industry. COVID-19 brought a further dimension to a set of deep external challenges that would bring lasting structural change to business and society.
At the end of the financial year, our results are evidence of mature and robust operations and people. By ensuring the well-being of the business, our employees and clients as a priority, Capricorn Group endured and performed well under extremely challenging conditions.
The widespread impact of the COVID-19 pandemic will probably only become fully visible in the next financial year. In an effort to mitigate the impact on our clients, we have been assisting them in a financially responsible way, appropriate to each within their unique circumstances. Our response varied as some clients were better positioned than others to cushion the impact. We engaged proactively and kept close to our clients.
I am proud of the Capricorn citizens who embraced the many changes brought on by the pandemic and who adapted to new ways of working, while continuing to serve our clients. The health and safety of our employees was our first priority and we had all the necessary personal protective equipment available within several days and provided on-site clinics for screening.
The most significant impact from COVID-19 to date is the loss of income due to a reduction by central banks of their bank rates by 225 bps in Namibia, 50 bps in Botswana and 225 bps in Zambia since March 2020. The effect of lower income on profitability was further
exacerbated by increased credit impairment losses as customers found it increasingly challenging to service their debt while non-interest income was severely impacted by the forced closure of businesses in what became a new buzzword – lockdown.
These impacts are discussed in detail in the financial director’s review from page 31.
Reflecting on our AsOne2020
strategy cycle
The three-year strategy cycle that came to an end this financial year focused on operational excellence, executed through four strategic choices and guided by the behaviours in The Capricorn Way.
We achieved a significant part of what we set out to do. By applying operational excellence as a deliberate strategy, we were able to get solutions through our systems and channels to the client.
Significant achievements over the three-year period included:
• Bank Windhoek now has the highest market share for loans and advances in key segments and second highest market share for deposits in Namibia.
• Bank Windhoek increased the number of customers per full-time employee over the three years with an additional nine customers per employee.
This year has been one in which we learned to embrace change in a new way. We stepped into roles and shoes that none of us anticipated. No matter what
we faced, we made connections, we made a difference and took our responsibility as Capricorn citizens seriously.
23