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Johannesburg - Capitec has disagreed with a report on Fin24.com which stated growth in client numbers at the banking group is slowing down, saying it has "reclassified" inactive accounts.
Fin24.com reported on Wednesday that Capitec appeared to have only added 50 000 new clients to its operations since August 2009, as opposed to 500 000 in its previous financial year. This followed Capitec reporting annual results to end-February earlier on Wednesday.
Capitec's head of communications Carl Fischer said the bank has reclassified some inactive accounts. "In fact, the true change is from 1.5 million customers to around 2.1 million [a 37% increase] during the year," he said.
However, that would still imply that as many as 500 000 accounts have been reclassified as inactive.
"That's probably about right," said CEO Riaan Stassen.
He pointed out that part of the reclassification process saw defaulting customers handed over for collection.
While Capitec was able to report 44% growth in headline earnings per share, it is starting to face stiff opposition from the likes of First National Bank, Standard Bank and Nedbank which have rolled out a number of technology-driven solutions directed at the lower end of the market.
With the counter trading at a price to earnings ratio of around 21 times at the moment, Sanlam Investment Management portfolio manager Patrice Rassou said Capitec is "fully priced".
Rassou said many consumers who approached Capitec for accounts did so to obtain short-term loans. As they start to get their heads around the credit cycle, some of this demand is drying up. "They may revert back to their primary bank where their homeloan and mortgage is," he said.
Fischer agreed that technology is starting to prove a good leveller for the sector, pointing to the success of the cellphone and SMS banking solutions rolled out by FNB and Capitec. "They've taken off like a rocket," he said.
Stassen said Capitec is investigating a number of new initiatives, particularly around its Global One flagship product which offers savings and transactional features in a single offering.
However, he downplayed any speculation that the bank was considering a move into business or merchant type products. "If we can't take a picture of you, we are not going to open an account," he said.
On Wednesday Capitec shares were up 150c (1.6%) to 9 400c per share.
- Fin24.com
*The writer holds shares in Capitec.
