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As it happened - Capitec CEO says Viceroy report 'full of inaccuracies'

2018-01-30 16:42

The bank, whose share price declined by as much as 20% on Tuesday before recovering to trade 3% down, hit back at the research report, saying it was published with a clear "profit motive".


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Last Updated at 23:53
30 Jan 17:46

The media briefing has ended.

Fourie, in short, accused Viceroy of not understanding the bank's business, getting its figures wrong, and publishing the report with a clear "profit motive" to push down Capitec's price. 

He noted that the SA Reserve Bank had put out a statement to say that bank's fundamentals were sound, and that Viceroy could have approached Capitec directly for more information. 

He said that Capitec employees have been unable to reconcile how Viceroy did their sums. 

The bank's share price, which had declined by 20% at noon, has since recovered. It was trading down 3% at 17:30. 

30 Jan 17:40

Capitec CEO Gerrie Fourie says the bank has been unable to reconcile how Viceroy Research came to the conclusion that it would have to write off R11bn in bad loans. 

The figure was one of the main points in the report that was released on Tuesday morning. 

"We can't reconcile it," he said at a media briefing on Tuesday. Fourie said as soon as the report was released on Tuesday morning, he tasked Capitec employees to try and find out how the sum was made. 

He said that Viceroy didn't disclose how they arrived at the sum. 

"Our people are still on it now," he said.  

30 Jan 17:21

Gerrie Fourie, Capitec's CEO, has started the media briefing to reply to Viceroy's report.

He noted that the SA Reserve bank has said "there are no problems with Capitec". 

He has denied that Capitec is similar to African Bank, which was placed under SA Reserve Bank (SARB) curatorship in 2014.  

He said the report was full of inaccuracies. 

He has also said that Viceroy had a "profit motive" in putting out the report. 

"They short the stock and then bring out a statement," he said.  

Fourie said he has instructed his attorneys to take up the matter with the FSB. "We are not happy with the way they went about it".

"In Capitec we believe we have built a bank on strong fundamentals," he said.  

Fourie said the bank has a strong client base and a growing transactional client base.

30 Jan 17:14

30 Jan 17:11

Capitec's leadership, who have been on a conference call with analysts, are set to start their briefing in a few minutes. 

The bank's share price, which had dipped 20% on Tuesday by noon, has since improved during the course of the afternoon to trade down 4% at 16:55. 

30 Jan 17:04

Who is Viceroy Research, what does its new report say, and why is it being taken so seriously by SA investors? 

Fin24 answered the most pressing questions. 

30 Jan 16:58
The briefing is set to start in five minutes. 

30 Jan 16:53

30 Jan 16:53

There were fairly long queues at Capitec AMT's on Tuesday, although these may be usual ATM traffic after payday.  

30 Jan 16:53

Viceroy stated in its report that Capitec risked a similar to fate to that of African Bank, which was placed under SA Reserve Bank (SARB) curatorship in 2014. 

It specifically called on the central bank to likewise place Capitec, SA's fourth-largest bank by market capitalisation, under curatorship. 

But on Tuesday SARB told Fin24 in an emailed response to questions that the bank meets all prudential requirements.

"As part of our mandate, we monitor the safety and soundness of all banks, including Capitec Bank. According to all the information available, Capitec is solvent, well capitalised and has adequate liquidity. The bank meets all prudential requirements," said the SARB in its emailed response.

30 Jan 16:43

On Tuesday morning at 10am, US-based short seller Viceroy Research released a new report into SA bank Capitec, in which it alleged that Capitec was using new loans to repay existing loans. 

Viceroy, which became well known among SA investors for the research report it published into embattled SA retailer Steinhoff, claimed Capitec may have to write off a total of R11bn in bad loans.

It also called for the bank to be placed under curatorship by the SA Reserve Bank, although the central bank replied that in its view Capitec was "solvent, well capitalised and has adequate liquidity".

SA companies and analysts had been speculating for weeks about what the next local target of Viceroy would be, after the group announced last month it was researching another SA company. 

In response to the report, Capitec's shares fell by up to 20%, before recovering to trade about 9.3% down at 14:00. 

It came out swinging against the US-based firm, calling the report 'baseless' and 'filled with factual errors'. 

It later convened an impromptu media briefing, which is set to begin at 17:00 in Cape Town. 

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