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Capitec ventures into foreign waters

Mar 24 2017 17:47
Adiel Ismail

Capitec CEO Gerrie Fourie. (Supplied)

Company Data

CAPITEC BANK HOLDINGS LIMITED [JSE:CPI]

Last traded 1097
Change -3
% Change 0
Cumulative volume 202282
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] is making its maiden venture into international markets, but investors have shown little enthusiasm if the bank's share price is anything to go by. 

South Africa’s fastest growing full service retail bank announced on Friday that it will purchase a 40% stake in Creamfinance for €21m, in a deal described as an "appropriate match" by Capitec CEO Gerrie Fourie.

However, the share price of Capitec was down 0.43% at R804.25 at the close of markets on Friday in Johannesburg, after recovering from the day's low of R800.02.

Creamfinance uses sophisticated technology and advanced Smart Data credit scoring methods to provide online consumer loan products.

The European digital, consumer finance company, has an international footprint in Latvia, Poland, Czech Republic, Georgia, Denmark and Mexico.

Matiss Ansviesulis, CEO and co-founder of Creamfinance said they are inspired by the Capitec story of simplicity and transparency and they are looking forward to the partnership.  

“We view the foreseeable future as a period to learn and gain experience in managing a remote business through a foreign partnership, while creating a new revenue stream in a diverse pool of foreign currencies and gaining insight into advanced technology and credit models that we may be able to use at home,” said Fourie.

He said the new partnership provides Capitec with an opportunity with a specific focus on advancing credit in the international and online environment.

Fourie said the prospect of entering international markets was a part of the group’s initial plan; and these intentions were echoed by chairperson Riaan Stassen as well as the management team.

"It was only a matter of allowing the bank to mature to a point where it was ready to take its first international step.”

Creamfinance’s online business model has been developed in such a way that new countries can be entered swiftly and efficiently, requiring limited investment in local infrastructure, he said.

"Capitec’s focus will be to provide strategic input and give access to skills in key areas such as information technology, credit management and the development of term loan products, thereby assisting Creamfinance to further grow its international business,” explained Fourie.

Capitec expects profits for the year ended 28 February 2017 to be between 16% and 19% higher than the previous year. It expected its headline earnings per share to rise by between R32.33 and R33.17 a share from R27.87 a share in the prior year.

Capitec’s financial results will be published on 28 March.

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