How Capitec Keeps Winning


Capitec Bank’s profit increased by 26% for the year ending February following strong client-base growth

Capitec gained over a million new active clients during the period of review, taking its client base to 7,3 million people, which boosted the bank’s net income to R3,2 billion – up 26% from R2,55 billion last year.

The results also reveal that more clients were actively transacting during the course of the year, driving a 16% growth in net transaction fee income totalling R3 billion, Fin24 reports.

“This year has seen the largest growth in our client numbers since we started the bank. According to the comprehensive AMPS survey for the period to June 2015, 20,6% of South Africans regard Capitec Bank as their primary bank, up from 18,9% for the period to December 2014,” it said in a statement.

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Despite delivering impressive results Capitec has issued a warning over difficult economic conditions, which are expected to persist for the rest of the year, as well as the potential risk of a credit downgrade from Standard & Poor’s in 2016.

“Capitec has proven its ability to manage the impact of economic pressures while maintaining conservatism in our unsecured lending book, liquidity and capital,” Capitec CFO André du Plessis said.

“The South African sovereign credit ratings are scheduled to be updated in June 2016 and the risk remains real that a downgrade may occur. This will place pressure on Capitec’s ratings, along with other financial institutions, which could impact the volume and cost of funds to be sourced in the market.”

Capitec was named the world’s top-ranked bank in global banking advisory firm The Lafferty Group’s inaugural Bank Quality Ratings index earlier this month.

Capitec beat out large international banking groups the likes of HSBC, Deutsche Bank, Goldman Sachs and JPMorganChase to take top spot.

The bank’s Global One account has also been rated the best value for money bank account for the middle-income bracket.

According to the 2015 Solidarity Research Institute (SRI) Bank Charges Report, the Capitec Global One account is leaps and bounds cheaper than any other account the big four banks offer to middle-income earners.

The research compared Standard Bank’s Elite Plus, FNB’s Gold Cheque Unlimited, Absa’s Gold Value Bundle, Capitec’s Global One and Nedbank’s Savvy Plus account.

Source: Destinyconnect

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