Adjusted earnings per share increased to R45.77 in the year through February, Capitec said in a statement on Thursday. Fee income jumped 26%, while the lender lifted its deposit base 23% to R71bn ($4.8bn).
Key insights
In January and February, Capitec added 500,000 new clients, with March’s performance likely to push figures up to over 700,000, Chief Executive Officer Gerrie Fourie said by phone Thursday. The lender’s growth was also driven by a strong credit performance, with a 15% growth in total loan advances, Fourie said.
Capitec is diversifying from its unsecured-lending focus to expand into business banking after acquiring the Johannesburg-based unit of Portugal’s Caixa Geral de Depositos SA. It is also making a push to grow its retail offering and add more funeral policies.
While Capitec’s larger competitors are reducing branch networks, with Standard Bank Group Ltd., Absa Group Ltd. and Nedbank Group Ltd. also reducing the retail space they hire, the lender added 14 new points of presence last year.
Capitec and its peers face rising competition from at least three new banks launching in South Africa, and are digging deep to retain customers. “If you look at our branch network two to three years ago, we were opening up 60 to 80 branches per year,” Fourie said. “We are planning 25 for the year ahead and we are still opening up because we believe there are pockets of opportunity. Our branches are much smaller than our competition’s branches” and are moving away from transactions to informing clients, he said.
Market Reaction
The stock has gained 15.4% this year, by far outpacing all five other members of the FTSE/JSE Africa Banks Index, which is down 2.4%.
