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Capitec banks more earnings as self-service transactions surge

Sep 27 2017 11:12


Company Data

CAPITEC BANK HLDGS PREF [JSE:CPIP]

Last traded 88
Change 1
% Change 1
Cumulative volume 500
Market cap 0

Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Cape Town - Capitec Bank [JSE:CPI] announced on Wednesday that headline earnings for the six months to August 31 2017 grew to R2.05bn, from R1.75bn in the previous comparable period.

Return on shareholders’ equity for the current period was 26%. Loan revenue, in line with loan book growth, increased by 10%. Loans and advances in an arrears and rescheduled status fell by 14%, while the net loan impairment expense increased by 8%.

Net transaction income grew by 29% in the current six-month period, and operating expenses increased by 20% in support of the bank’s growth initiatives.

Net transaction fee income covered 76% of operating expenses (August 2016: 70%) and contributed 40% to net income (August 2016: 37%).

Capitec retained a strong capital adequacy ratio of 35%. At the end of the trading period, the bank employed 13 532 people (August 2016: 12 479) and had created 1 053 new jobs.

By the end of August 2017, Capitec had 9.2 million active clients and increased its number of branches to 811. This represents client growth of 106 000 per month over the last 12 months.

“We have evolved our product solutions towards more personalised offerings for clients. In line with this, we’ve changed our credit offering by lowering both interest rates and credit card fees to bring the cost of unsecured credit more in line with that of secured credit,” Capitec CEO Gerrie Fourie said in a statement.

The bank offers interest rate options from as low as 12.9% per annum for clients on fixed term credit products, and has reduced the monthly fee on its credit card to R35 per month, said Fourie.

Continued brand acceptance resulted in a 29% increase in retail deposits and transactional growth for the current period, said Fourie, adding that Capitec increased its number of self-service transactions by 43%.

Capitec’s global long-term credit rating of BB+ was not downgraded along with the sovereign and other South African banks earlier this year. This means that Capitec is now rated the same as the sovereign and the other South African banks.

“The value we generate for our clients through personal service and delivery of affordable, accessible financial solutions, drives the growth of our company. Investing in our people and infrastructure supports this growth and allows us the opportunity to create jobs," said Fourie.

Capitec was voted the best digital bank of 2017, and was recognised as the fastest growing brand in South Africa and best bank in the world by Laferty Group for the second consecutive time during the period.

Shares in Capitec traded 0.11% up at R889.91 on the JSE at around 10:30.

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capitec  |  earnings reports  |  banking
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