Capitec Names Gerrie Fourie CEO as Founder Stassen Retires

Capitec Bank Holdings Ltd. (CPI), South Africa’s second-largest provider of unsecured loans, said Gerrie Fourie will become chief executive officer when Riaan Stassen retires at the end of the year.

The Stellenbosch, South Africa-based bank said Fourie, 49, will take over on Jan. 1 from Stassen, who turned 60 this year. Fourie is responsible for the lender’s sales and operations, Capitec said in a regulatory statement today.

Under Stassen’s leadership, Capitec became South Africa’s sixth-largest bank by market value with more than 8,000 employees, about 600 branches and almost 43 billion rand ($4.3 billion) in assets. While rival African Bank Investments Ltd. (ABL) warned of a drop in profit as loans sour amid a slowing South African economy, Capitec has continued to show growth.

Stassen was “the heart of the management team that established Capitec Bank in 2000,” the lender said. The executive said in an interview today that he plans to stay on the company’s board,

Capitec fell 0.8 percent to 201.27 rand by the close in Johannesburg, paring this year’s gain to 10 percent. The six-member FTSE/JSE Africa Banks Index gained 1.4 percent today, bringing the year’s advance to 5.1 percent.

“Obviously he was iconic in that position and was the pioneering spirit behind the bank, so shareholders will be sad to see him go,” Craig Pheiffer, general manager of investment at Absa Asset Management Private Clients in Johannesburg, said in an e-mailed response to questions today. “But his successor has been there since the start too.”

Boosting Provisions

Net income rose to 980.8 million rand for the six months through August from 710.8 million rand a year earlier, Capitec said today. Diluted earnings per share rose 21 percent to 8.38 rand and the dividend climbed 20 percent to 2.03 rand. Fee income from loans fell 26 percent to 465 million rand while Capitec boosted its provisions for bad debts 70 percent to 3.2 billion rand.

While the loan book will continue to decline, Capitec is “confident it will continue to grow its customer base” and increase transaction income, Stassen said in the interview. “Since June there has been a decline in arrears. I can’t see why we can’t render good returns going forward.”

Strikes Disruptive

Unlike African Bank, Capitec takes in customer deposits and is able to benefit from fees and commissions linked to clients’ transactions. Capitec now has 5 million active clients, it said. Although numbers have grown, labor unrest including wage strikes have been disruptive, according to Stassen, who said the number of clients who lost their jobs in the fiscal first half rose 9.5 percent from a year earlier.

“Despite South Africa’s medium-term challenges, we remain excited about the future and the opportunities available to us,” the company said. “Unsecured credit is here to stay.”

Capitec, which usually sells debt in November, is not planning further sales this year because of a rights issue last year that boosted capital and also slower lending, Stassen said.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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