How Capitec Is Disrupting South Africa’s Banking Industry


Capitec’s huge strides in the banking sector haven’t gone unnoticed, with more and more industry players recognising that the bank has earned its place in the big league.

Many are even now referring to the ‘Big Five’ banks in South Africa, and S&P believes that Capitec has mastered the art of disruption, so much so, that it sees it becoming a “serious challenger in the mass- and middle-market retail banking space”.

According to the report released on Thursday and published by Fin24, the bank has grown its customer base from 1,5 million in 2009 to 7,3 million as at the end of February this year, meaning that Capitec now enjoys around 17,5% of SA’s banking market share.

“We expect the bank’s rate of customer acquisition will slow down, but we still believe it could become the country’s third-largest bank in terms of customer numbers by end 2017,” the report read.

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Last year, the Solidarity Research Institute (SRI) found that Capitec – for the third consecutive year – offered the most competitive banking charges across the biggest banks for low- and middle-income earners.

It’s also the only bank to offer interest on positive account balances, but further growth is being stifled by limited product offerings. Analysts say the bank needs to focus on creating more diversified streams of revenue from offerings like credit cards and vehicle financing, which would pull in greater volumes of new customers and earn the bank a bigger slice of the market.

Capitec has had a good start to the year, reporting in March that profits for the 2015 financial year had grown by 26% as it added one million new customers to its base.

According to the SA Customer Satisfaction Index, consumers found it the most satisfying bank for the second year in a row, giving the bank a satisfaction rating of 83,3 out of 100 – outperforming the average banking industry score of 75,6.

The biggest accolade for the bank so far this year came from international banking advisory firm The Lafferty Group, which named Capitec the world’s top-ranked bank in its inaugural Bank Quality Ratings Index released in March. Capitec beat global banking groups the likes of HSBC, Deutsche Bank, Goldman Sachs and JPMorganChase to the top spot.


source: Destinyconnect

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