Huge profit leap for Capitec as it grows client base to 22 million

Capitec Bank has reported double-digit growth for the financial year ended 29 February 2024.

Headline earnings were up 16% to R10.6 billion (2023: R9.2b).

Headline earnings for the 6 months ended February 2024 jumped 25% to R5.9 billion, compared to the second half of 2023.

Headline earnings per share (HEPS) increased by16% to 9 171 cents.

In its annual report, Capitec highlighted the diversification of the Retail bank driven by the introduction of new products.

Retail bank active clients grew 10% to 22.2 million (2023: 19.9 million).

Around half of these, 11.2 million, use the banking app (2023: 9.4 million).

While Capitec is certainly doing something right to achieve stellar results in a difficult business environment, Bruce Whitfield also finds out about the downside.

He asks CEO Gerrie Fourie about the group's rise in provisions for credit losses.

Fourie puts the issue of impairments into perspective.

"I you look at our results in September we were concerned about our impairments, and we reported an 11% credit loss ratio."

"We've pulled back quite a lot after opening up in November 2022 not knowing about the world problems about to happen, and if you look at the credit loss ratio now for the six months that just ended, we had 9.2... through the cycle we had 8.5..."

Gerrie Fourie, CEO - Capitec Bank Holdings

The new loans Capitec has granted are in line with their expectations, so they're confident they we can get the numbers to where they we expect it to be, Fourie says.

He notes that 2024 is proving a bit more stable than 2023, and while the economy is still under pressure he believes there are positive signs.

"I think the million dollar question is what is going to happen in the Middle East, and then what is going to happen in the election... We'll be tight on credit and manage it carefully."

Gerrie Fourie, CEO - Capitec Bank Holdings