Capitec earns more from transactions despite cutting banking fees


Capitec said on Thursday its focus on personalised service resulted in it adding 200,000 new clients per month in the six months to end-August, when the group grew its client base to 12.6-million.

The group is facing stiff competition in the form of new banking entrants, including TymeBank and Discovery Bank. Capitec said its focus on digitalisation was paying off. A switch to digital transactions by clients resulted in net transaction fees rising 12%, despite the bank lowering fees.

About 6.8-million clients make use of digital channels, an increase of 44.6% from the prior comparative period.

Headline earnings per share rose 20% to 2,545c for the period, with the group upping its dividend 20% to 755c per share.

Retail deposits increased 23% to R81.4bn, the company said in a statement. It reported that its gross credit card book rose 71% to R4.55bn.

The group’s gross loan book increased by 17% to R60.25bn and total arrears up to three months decreased by 11% to R2.16bn at the end of August 2019.

The company on Thursday said it continued to tighten credit controls, and the National Credit Act would not compromise its portfolio.

The controversial debt-relief law was implemented in August and will result in payments of overindebted consumers being suspended, in part or full, for as long as two years, or even cancelled if they remained financially distressed.

Capitec said on Thursday less than 5% of its credit book fell within the scope of the act.

The group said on Thursday it remained optimistic regarding SA’s long-term prospects and would continue to focus on delivering simple, affordable and accessible banking services.

Capitec has outperformed the JSE banking index so far in 2019, with its share price rising 14.11%, compared with a 3.87% fall in the index.

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