Capitec Bank Holdings Ltd., South Africa’s second-biggest provider of unsecured loans, said fiscal full-year profit rose 46 percent as the lender added almost a million new clients.
Net income rose to 1.58 billion rand ($170 million) in the year through February from 1.08 billion rand a year earlier, the lender, based in Stellenbosch near Cape Town, said in a statement today. The dividend rose more than a third to 4.05 rand per share, while earnings per share excluding one-time items climbed 35 percent to 15.19 rand, beating the 14.41 rand median estimate of 12 analysts surveyed by Bloomberg.
“We have 971,000 clients more than a year ago using their accounts more often; some borrow from us, some save with us, some transact with us, and many do all three,” Capitec said. “Our share of the unsecured market is 17 percent, up from 14 percent a year ago. This is rapid growth, but also means that we can keep on growing for a long time.”
Capitec targets the low-income market in South Africa, offering loans that are not backed by assets. While the country’s growth in unsecured lending has slowed, as many as one in three of these types of loans goes bad. Capitec taps the debt markets to boost its levels of cash in reserves, completing a rights offer in November which raised 2.2 billion rand and pushed its capital adequacy to 41 percent from 39 percent a year ago.
“Responsible management of the quality of our loan book will remain a priority,” the company said. “We expect economic conditions to remain difficult but believe that our client base and transaction income will continue to grow.”