Page 33 - Capricorn IAR 2020

2020 INTEGRATED ANNUAL REPORT
FINANCIAL DIRECTOR’S REVIEW
The Group’s financial strength and resilience is the outcome of effective strategy implementation, decisive choices and clear long-term financial targets. Our financial performance is supported by a robust risk, internal control and assurance framework.
Key financial indicators and 2020 targets to build sustainable competitive advantage
Return on equity
is the overall measure of our success
16.3%
12.6%
15.1%
ROE from continued operations
2019 2020
Events that shaped the year under review
• Strong Group performance during the first
nine months of the year with an increase in profit before tax of 15.6% before the impact of COVID-19
• The COVID-19 pandemic caused substantial financial strain during the last three months of the financial year, with a significant impact on interest margins as a result of the unprecedented rates cuts, a decrease in non-interest income following lockdown measures, and an increase in impairments due to the financial pressure on various clients
• Capricorn Group contributed N$5 million to COVID-19 relief measures which included direct support to government as well as projects to support vulnerable communities. Read more about the Group’s response to the pandemic on pages 27 and 29
• We successfully implemented IFRS 16 – ‘Lease requirements’. For an analysis of the impact refer to note 1.3.1 (a) of the annual financial statements
• The sale of Cavmont Bank, which had been loss-making for three years, to Access Bank Zambia was announced and the transaction is expected to be completed during the last quarter of 2020
• Capricorn Group acquired a 30% shareholding in Paratus Group Holdings Ltd on 1 July 2019 in line with our long-term ambition and strategic choices to transform the business using data and digital
2019
60.8%
2019
40.2%
2019
4.1%
2019
88.7%
We want to maintain 2020 cost to income ratio 59.4%
below 60%
We want
income
We want the ratio of
non-performing loans 2020 as a % of loans 4.7%
and advances
to be <4.5%
non-interest income
to be more than 2020 45% of operating 44.5%
We want to
keep the loan 2020
to funding ratio 87.9% below 90%
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