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Johannesburg - Mass-market lender Capitec Bank Holdings
[JSE:CPI] aims to raise R2.25bn through a rights issue to boost lending and
fund growth in its branch network, it said on Wednesday.
Capitec, which also reported a 35% surge first-half profit,
said in a statement it planned to offer over 14 million new shares at R160
each, a discount of over 22% on Tuesday’s closing price.
“The bank's focus has been to acquire more transacting
clients‚ reduce the cost of credit and maintain stringent credit criteria‚”
Capitec said in a statement.
Capitec’s active clients increased to 4.2 million during the
period‚ from the 3.2 million recorded last year.
“The focus remains on acquiring clients that will use
Capitec as their primary bank. Many clients have accounts at a number of banks
but choose one as the account into which their salaries are deposited and from
which payments are made‚” Capitec said.
The bank said it will expand its branches by between 50 and
75 branches per year for the next three years.
“Opportunities exist to broaden our market to include higher
income clients that are increasingly exposed to our simplified‚ low-cost offer
and are finding that the Global One solution is perfect for their needs‚”
Capitec said.
“In anticipation of the growth prospects in the market in
which Capitec operates and of the new Basel III capital requirements‚ Capitec's
board of directors and executive management believe it is responsible to proactively
optimise the capital base and provide the financial flexibility needed to
support the group's growth prospects by raising capital through the rights
offer‚” Capitec said.
The bank said it will offer 7 new shares for every 50
currently held.
“The R2.25bn in proceeds from the rights issue will be
utilised to fund growth in the loan book as well as expansion of the branch
network by between 50 and 75 branches per year for the next 3 years,” it said.
Capitec said its headline earnings per share for the six
months to the end-August rose 35% to 702 cents, the top end of the range it had
flagged to the market.
Capitec’s interim dividend also increased by 35% to 169
cents.
Shares of the bank are up 16% so far this year, compared with a 13% increase in the All Share [JSE:J203] index.
