South Africa’s Capitec profits rise as client numbers climb

JOHANNESBURG / Reuters

South African lender Capitec Bank Holdings reported a 26 percent rise in full-year profit on Wednesday, in line with forecast, as growth in client numbers boosted both interest and transaction fee income.
Capitec, which grants loans not supported by assets, said it gained 1 million active clients, to total 7.3 million customers, over the past year as feeble growth in Africa’s most advanced economy forced thrifty South Africans to shop around.
Capitec posted diluted headline earnings per share of 2,781 cents for the fiscal year ended Feb. 29, compared with 2,206 cents a year earlier. The lender had flagged earnings could rise by as much as 27 percent.
“We expect difficult economic conditions to persist. We see this as an opportunity to gain more clients as they look for value and better service from their bank,” Capitec said in a statement.
Though transaction fee income rose 16 percent to 3 billion rand ($197.56 million), interest income remains Capitec’s largest source of revenue, increasing 16 percent to 12.5 billion rand.
Capitec Bank is a commercial bank in the Republic of South Africa. It is one of the locally controlled banks licensed by the Reserve Bank of South Africa, the South African national banking regulator.
When it comes to customer satisfaction as per the results by South African Customer Satisfaction Index (SAcsi) in 2015, Capitec Bank comes first with 82.2 points. Capitec Bank has emerged as the best bank in the world by International banking advisory group Lafferty in its inaugural Bank Quality Rankings.
The bank operates as a retail bank that serves both individuals and businesses, but does not provide business banking for close corporations, companies, partnerships or trusts. It claims to focus on simplifying the banking experience, according to their literature. The bank maintains over 668 retail branches nationwide, 3418 own or partnership ATMs and has over 6.2 million customers, according to the 2015 Chief Financial Officer’s Report.
Of these customers, 309000 are online banking customers and 3.5 million are mobile banking customers. According to the annual results for the 2015 financial year, the asset base of Capitec Bank was in excess of R53.9 billion, with R11.6 billion in equity, and with retail savings deposits increasing by 32 percent for the year to R19.3 billion and retail fixed savings increasing by 19 percent to R10.7 billion for the year.