Capitec Bank reports 30% surge in earnings, diversification bears results

CAPITEC, the digital bank with more than half of South Africa as clients, increased headline earnings 30% to R13.7 billion as its diversification initiatives over recent years started to unlock value for its clients and the bank.

- EDWARD WEST

The share price surged 7.1% to R3 350.77 on the JSE Wednesday afternoon after the release of the results for the year to February 28, while the JSE All Share Index was only up by 0.28%, which indicated that investors were also optimistic about the bank’s prospects.

Over the past five years, the bank's journey has included the introduction of business banking, value-added services (VAS), Capitec Connect, and insurance under its own insurance licence. This diversification leveraged the group's active client base, which now exceeds 24 million, with 13 million of the clients actively engaging with their app.

CEO Gerrie Fourie said in a presentation that the earnings for the financial year, were “extraordinary” and the best set of results he had presented for the bank, despite the challenging economic climate.

He said in an interview that the bank was currently performing as well as it did at year-end, and he did not foresee, at this stage, any major challenges that might disrupt them achieving another year of double-digit earnings growth.

“We have always believed that banking should be simple, affordable, accessible, and personal. Through our high-volume, low-margin business model, we are enabling everyone to access solutions that allow them to take control of their finances, protect their families, manage businesses, and unlock opportunities,” he said.