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Bank Windhoek capital goes to Basel III

After a successful Initial Public Offering last month, Bank Windhoek has said it will use part of the proceeds of the listing to strengthen its mandatory capital requirements ahead of the implementation of Basel III.
The bank recently floated 20.1% of its shares in an Initial Public Offering (IPO) that was oversubscribed 3.5 times raising about N$387.9 million in capital.
The public offer, which opened on 16 May 2013, closed on 13 June 2013.
Although the bank’s capital adequacy ratio stands at a healthy 13.7% as at December 2012, a figure well above the Bank of Namibia’s minimum regulatory requirement of 10%, Marlize Horn, Executive Officer: Marketing and Corporate Communication Services at Bank Windhoek told the Economist upon enquiry that proceeds raised from the listing will be invested in the bank to further increase its Tier 1 capital ahead of the implementation of Basel III.
Part of the capital will also be used to fund significant investment over the next three years in information technology and innovative payment systems to enable the bank to better service its existing client base and to better penetrate the unbanked and under-banked market in the country.
The remaining funds will be retained to enable Bank Windhoek Holdings, the parent company of Bank Windhoek, to consider further investment opportunities as and when they arise.
It was, however, not immediately clear how much the bank will invest to improve its capital reserves and how much will be invested in IT infrastructure.
Tier 1 capital is money that a bank has on its balance sheet to support all the risks it takes arising from lending and trading.
While the Namibian banking sector continued to meet regulatory liquidity requirements, the ratio of liquid assets to average total liabilities to the public declined marginally from 11.1% at the end of the first half of 2012 to 10.9% at the end of the second half of 2012 according to the latest Bank of Namibia Financial Stability report.
A stress test exercise conducted by the central bank indicated that banking institutions are adequately capitalised in the event of an upsurge in the default rate of sectors to which they are exposed. Stress test scenarios were conducted to examine the extent to which the ‘first’ capital buffer (Core Tier 1 capital) would be able to withstand an increase in credit risk in the form of an increase in default rates.

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Following reverse listing, public can now acquire shareholding in Paratus Namibia


20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.