Publications
Partners
Cape Town - The share price of Capitec Bank Limited [JSE:CPI] (Capitec) on the JSE has staged a comeback on Tuesday, following concerns that it would suffer the same fate as embattled African Bank Limited [JSE:ABL] (African Bank).
Capitec muscled its way into the top spot on the JSE with its shares trading up 4.19% at R219.00, before reaching 3.04% at R216.60 at the close of the SA market.
In what could be seen as a vote of confidence in the bank, director and former CEO Riaan Stassen, on Tuesday bought 5 000 shares to the value of R1 025 000.
Capitec also announced that it has repurchased an additional 86 180 preference shares, representing 3.0% and bringing the cumulative number of preference shares repurchased to 527 899. This is 18.4% of the issued preference share capital.
"The preference shares were repurchased for an aggregate value of R7 735 842.00."
"Prior to the latest repurchase, the company has repurchased 441 719 of its preference shares, representing 15.4% of its issued preference share capital."
Capitec is entitled to repurchase a further 45 904 preference shares in terms of the current general authority, which is valid until Capitec's next annual general meeting, subject to the requirements of the Banks Act, the company said in a separate Sens announcement.
The repurchase of preference shares were done due to Banks Act Regulation changes following Basel III implementation in South Africa, resulting in 20% of the preference share capital no longer contributing to the capital adequacy ratio of the bank.
Capitec said the repurchased preference shares will be de-listed and cancelled upon registration of the preference shares in the name of Capitec.
On Monday the bank’s shares tumbled by as much as 6% in early trade after international ratings agency Moody's downgraded Capitec by two notches, and placed it on review for a further downgrade, because of a lower likelihood of support from the SA Reserve Bank (Sarb) following the African Bank fiasco.
However, the Sarb, who launched a R17bn bailout of Abil, defended Capitec, saying it disagreed with the rationale for the cuts because Capitec does not follow the same business model as Abil.
The effect of the downgrade means Capitec will pay more for money that they raise on the international market in future, but the bank told Fin24 it is sufficiently funded.
“The good thing is we have enough funding and do not need to go to the market in the foreseeable future.”
Responding to the downgrade, Capitec finance director Andre du Plessis told Fin24 that the bank is disappointed with the downgrade since Capitec is not African Bank.
“We believe Capitec is very different, as we do transactions and deposit banking, which makes us less reliant on unsecured loans to make a success of the business,” he said at the time.
- Fin24
Capitec muscled its way into the top spot on the JSE with its shares trading up 4.19% at R219.00, before reaching 3.04% at R216.60 at the close of the SA market.
In what could be seen as a vote of confidence in the bank, director and former CEO Riaan Stassen, on Tuesday bought 5 000 shares to the value of R1 025 000.
Capitec also announced that it has repurchased an additional 86 180 preference shares, representing 3.0% and bringing the cumulative number of preference shares repurchased to 527 899. This is 18.4% of the issued preference share capital.
"The preference shares were repurchased for an aggregate value of R7 735 842.00."
"Prior to the latest repurchase, the company has repurchased 441 719 of its preference shares, representing 15.4% of its issued preference share capital."
Capitec is entitled to repurchase a further 45 904 preference shares in terms of the current general authority, which is valid until Capitec's next annual general meeting, subject to the requirements of the Banks Act, the company said in a separate Sens announcement.
The repurchase of preference shares were done due to Banks Act Regulation changes following Basel III implementation in South Africa, resulting in 20% of the preference share capital no longer contributing to the capital adequacy ratio of the bank.
Capitec said the repurchased preference shares will be de-listed and cancelled upon registration of the preference shares in the name of Capitec.
On Monday the bank’s shares tumbled by as much as 6% in early trade after international ratings agency Moody's downgraded Capitec by two notches, and placed it on review for a further downgrade, because of a lower likelihood of support from the SA Reserve Bank (Sarb) following the African Bank fiasco.
However, the Sarb, who launched a R17bn bailout of Abil, defended Capitec, saying it disagreed with the rationale for the cuts because Capitec does not follow the same business model as Abil.
The effect of the downgrade means Capitec will pay more for money that they raise on the international market in future, but the bank told Fin24 it is sufficiently funded.
“The good thing is we have enough funding and do not need to go to the market in the foreseeable future.”
Responding to the downgrade, Capitec finance director Andre du Plessis told Fin24 that the bank is disappointed with the downgrade since Capitec is not African Bank.
“We believe Capitec is very different, as we do transactions and deposit banking, which makes us less reliant on unsecured loans to make a success of the business,” he said at the time.
- Fin24
