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Johannesburg - Financial services group Capitec [JSE:CPI], trading up 4.79% at 7 938c per share on Thursday, could touch a price of 9 000 cents per share this year, according to Credit Suisse Standard Securities.
"The main driver for Capitec's growth will be the increase in its client base as the bank expands its branch network and attracts customers from bigger banks," the analysts wrote in a note to clients.
Several fund managers and analysts have recently queried whether the low-cost banking and microlending counter could continue its upward trajectory.
Capitec shares have risen from 13 000c five years ago to an all-time high of 8 000c in January.
The bank advised the market on Tuesday it expected headline earnings of between 30% to 50% higher than in 2009.
Credit Suisse Standard Securities analysts pointed out Capitec now had a footprint in all nine of South Africa's provinces,and was expected to grow its branch network by 29 to 400 by the end of 2010. This figure could rise to 750 by 2016.
"We also expect impairments to start improving by the end of full-year 2011 as the economy recovers," the firm said.
However, Paul Theron from asset management firm Vestact cautioned investors to take a close look at Capitec's full-year results at the end of March, specifically the quality of the group's loan book and revenue generated from transactions.
If impairments are rising, or borrowers are taking longer to repay their loans, it may be a sign that the quality of the loan book has declined.
- Fin24.com
*The writers holds shares in Capitec
