Great news for Capitec
Capitec is expecting a notable rise in both its earnings per share and headline earnings per share (HEPS) in its next interim results.
In a trading statement, the banking giant said it expects group earnings per share to be between 8,215 cents and 8,354 cents, representing an 18% to 20% year-on-year increase.
HEPS is also expected to rise to 8,174-8,312 cents, representing another 18%-20% increase from 6,927 cents in the interim period ended 31 August 2025.
Capitec said the improved earnings have been buoyed by continued growth across the company, despite elevated inflation and higher interest rates in South Africa.
“The expected improvement in earnings was supported by continued growth across the group’s diversified business activities during a period of elevated inflation and an increase in the repo rate,” it said.
It said its growth in commission and transaction income came from a continued expansion and optimisation of its client base.
The company now has over 26 million personal banking clients, with the interim period also seeing higher-than-average transaction volumes.
It said the high average transaction volumes were particularly supported by a solid growth in card transactions.
“Increased transaction frequency per client, together with higher average transaction values, contributed to continued growth in income from Value-Added Services,” Capitec said.
Despite challenging economic conditions in South Africa, the bank noted an increase in personal banking lending income.
“The forward-looking macroeconomic credit impairment charge grew due to the latest economic scenarios while book quality was maintained,” it said.
“Business lending activity resulted in a higher upfront credit impairment charge, and the forward-looking macroeconomic credit impairment charge also increased, similar to the Personal Bank.”
It also noted that its insurance offerings, including life insurance and “credit life”, had performed strongly in the latest interim period.
“Group operating expenses remained well controlled, led by technology-driven efficiencies, supporting profitability and returns,” it said.
After entering South Africa’s banking sector in 2001, Capitec has seen explosive growth in recent years, focusing on affordable banking services.
In the last five years, the company’s share price has risen by roughly 139%, with its market cap currently approximately R522 billion.
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