Page 27 - Capricorn IAR 2020

2020 INTEGRATED ANNUAL REPORT
• Assisted communities in need
• Procured testing kits to assist the government’s COVID-19
testing
• Assisted government in executing its stimulus package by
facilitating income grant payments
Bank Windhoek is embedding its position as a leader in sustainability finance in Namibia. Read more about the impact of our green bond in the case study on page 50.
We are proud of the digital offerings that we have developed over the past few years. EasyWallet is a success story and we are working on integrated point-of-sale and ecommerce offerings. Going forward we will focus on digitising our core business processes to create differentiating client experiences.
Although digital banking penetration in Namibia is low, mobile app use grew 46.0% and 34.6% of our clients are using some form of digital banking.
Our bancassurance offering enhances customer value as an add-on to banking products. We focused on an integrated sales approach, which improves cross-selling and upselling. The uptake was generally positive, boosted by the launch of the new account for Namibia Students Financial Assistance Fundholders and resulted in an increase in the average products per customer from 1.3 to 1.5.
Bank Gaborone
Bank Gaborone delivered solid results, reporting profit after tax
of BWP39 million, an decrease of 10.9% compared to the prior year. This is despite two rate reductions during the year, 25 bps in August 2019 and 50 bps points in May 2020.
One of Bank Gaborone’s strategic challenges is to achieve scale in terms of market share. We made satisfactory progress towards building scale and will continue to focus on this in the next strategy cycle.
The bank had a strong focus on client service and expansion. As a result, we now have a fully operational centralised branch administration centre and opened a new branch in our “bank of the future” format. The latter includes a new way of managing customer assistance and flow in the branch.
We launched a mobile app to enable instant, on the go banking for retail clients and convenient, secure and efficient Electronic Payment Solutions for businesses, including Point of Sale (“POS”).
Four BG Finance branches were closed and incorporated into the retail branch network. This enabled Bank Gaborone to offer a full retail proposition to clients in central locations where they could access a more comprehensive financial solution and hence a better in-branch experience overall.
The lockdown in Botswana due to the COVID-19 pandemic resulted in some productivity challenges but effective employee rotation allowed continued service delivery to clients. This highlighted the need for support structures in the business and the depth of expertise required for shift work. We will focus on training and upskilling post-COVID-19 as new digital platforms and skills will
be required to remain competitive.
We assisted clients by lowering digital platform fees and providing additional customer call centre contact numbers to improve access
to and response rate of the call centre. Branches operated with
the necessary health and safety procedures and protective gear. Predictably, new customer onboarding and transactional volumes declined.
Cavmont Bank
Cavmont Bank made an operating loss of ZK102 million, compared to a loss of ZK17 million in the previous year. As part of a focused turnaround strategy, the bank restructured and right-sized at the beginning of the financial year. The project consisted of two components:
• The rationalisation of the branch network by merging branches, the centralisation of back office operations and branch closures
• The streamlining of head office support functions aimed at ensuring an efficient business model to take advantage of growth opportunities, improve client service offerings and make provision for end-to-end banking solutions
Centralisation eliminated process duplication, reduced overall turnaround time on applications and improved client experience. Retail credit applications turnaround reduced from five days to 48 hours.
Highlights for the year included Cavmont Bank being the first bank to go live on the National Financial Switch, enabling clients to deposit directly into a Cavmont account at any Kazang agent or merchant. The SPENN application and partnership enhanced our digital presence and image.
On 31 July 2020, a month after the end of our financial year, Capricorn Group’s Zambian subsidiary, Cavmont Capital Holdings Zambia Plc (“CCHZ”), signed a Share Purchase Agreement with Access Bank (Zambia) Ltd (“Access Bank Zambia”), a subsidiary of Access Bank Plc, regarding a proposed merger of Access Bank Zambia and Cavmont Bank. Capricorn Group owns 98.03% of CCHZ, which owns 100% of the share capital of Cavmont Bank.
Under the terms of the agreement, Access Bank Zambia will acquire the entire issued ordinary share capital, assets and liabilities of Cavmont Bank while Capricorn Group, as the majority shareholder of CCHZ will reinvest at least ZK300 million of preference shares into the combined bank. Capricorn Group will hold preference shares in the enlarged Access Bank Zambia for five years, after which the preference shares will be acquired by Access Bank Plc for a maximum purchase amount of ZK300 million.
The combined bank will be a top 10 bank in Zambia and have a larger customer base, significantly higher asset base and will be well positioned to service the growing Zambian market. As a larger, better capitalised and more diversified bank, the combined bank will be ideally placed to participate in the long-term economic growth of Zambia, predicated on the country’s vast reserves of natural resources and fast-growing young population.
The net result provides an improved position for all Cavmont Bank clients, colleagues and shareholders. Clients can benefit from a larger, better capitalised and more diversified bank, while employees will have greater professional development opportunities in a larger, pan-African bank. Shareholders are able to realise their capital from a listed entity, on an illiquid stock exchange.
25