Capitec First-Half Profit Rises 25% as Bank Attracts Clients

Capitec Bank Holdings Ltd., a South African provider of unsecured loans, said fiscal first-half profit rose 25 percent after it attracted 576,000 new customers and opened more branches.

Net income in the six months through August climbed to 1.47 billion rand ($104.5 million), from 1.17 billion rand a year earlier, the lender, based in Stellenbosch near Cape Town, said Tuesday in a statement. Earnings per share excluding one-time items rose 25 percent to 12.71 rand, while the company increased its dividend 52 percent to 3.75 rand per share.

The lender, which provides loans not backed by assets, has been creating products to boost customer transactions and increase fee income. This has meant it has relied less on unsecured lending as South Africa’s economy slows and consumers contend with rising inflation and interest rates.

“We believe we can sustain the growth in client numbers and profitability,” Gerrie Fourie, chief executive officer, said by phone from Johannesburg. “You can probably expect bad debts to increase slightly. We’ve already increased our provisioning and we’re happy where we are now.”

Capitec, which plans to offer credit cards from early 2016 to lure more middle- to higher-income clients, is the best-performing bank stock in South Africa this year. It has gained 40 percent compared with the average decline of 4.5 percent on the six-member FTSE/JSE Africa Banks Index.

“Despite an unsupportive economic environment, we are bullish on retail banking and see opportunities to grow our client base and product offering,” Capitec said in the statement. “We are cautious on credit but remain optimistic that we can grow our loan book in a prudent manner.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE