Reserve Bank says Capitec is solvent, has adequate liquidity
This comes after a report released by Viceroy which likened the bank to a loan shark.
PRETORIA - The South African Reserve Bank (Sarb) says that according to all the information available, Capitec is solvent, well capitalised and has adequate liquidity, adding that the bank meets all prudential requirements.
This comes after US-based fund manager Viceroy released a report on Tuesday which likened Capitec to a loan shark.
The Viceroy research group called on the Finance Minister and the Sarb to immediately place Capitec under curatorship after branding the bank as a "loan shark with massively understated defaults - masquerading as a community finance provider".
Viceroy also produced the report that blew the lid on the accounting fraud at Steinhoff last year.
And this time it has its sights set on Capitec, essentially accusing the bank of preying on vulnerable and heavily indebted customers.
In its latest report released on Tuesday morning, Viceroy says it has found that Capitec has been advising and approving loans to delinquent customers in order to repay existing loans.
Viceroy says it compiled the report based on information from former Capitec employees, customers and people familiar with the business.
Read the Viceroy report 'Capitec: A wolf in sheep’s clothing'
Meanwhile, Capitec has responded to scathing accusations that it's masquerading as a community finance provider and a loan shark with massively understated defaults.
The bank has hit back, saying Viceroy’s report is filled with factual errors, material omissions in legal proceedings against it and doesn’t contain accurate information.
Capitec says it was never approached when the report was compiled and has promised to respond in more detail later.
The bank defended its business in a statement to the Johannesburg Stock Exchange on Tuesday.
“We believe our corporate governance is strong and our communications and disclosures are, and always have been transparent, clear and to the point,” the company said.
“On the face of it, the report is filled with factual errors, material omissions in respect of legal proceedings against Capitec and opinions that are not supported by accurate information,” it added.
Capitec said it had received a copy of the report only at 10 am (0800 GMT) on Tuesday and that Viceroy had not discussed any of its claims with the company.
Shares in Capitec Holdings dropped as much as 25% after US firm Viceroy Research said the South African lender overstates its financial assets and income.