Capitec Bank has reported a record growth of 1.3 million new clients – to 8.6 million during the financial year ended February 2017.
This positions the bank as the third largest in the country in terms of active clients, ahead of FNB, and only marginally behind Absa, with Standard Bank leading the way.
Primary banking clients (those clients who make regular deposits – mainly salaries) grew in line with total client growth and represent 46% of all active clients.
These primary banking clients are less likely to move their banking elsewhere and, on average, do five times more transactions than other clients, Capitec said.
The bank reported 18% growth in headline earnings to R3.8 billion for the year ended February 2017.
Additional financial highlights:
- Headline earnings per share up 18% to R32.81
- Total dividend per share up 18% to 1 250 cents
- Return on equity: 27%
- Operating costs increased by 18% to R5.4 billion in 2017.
- ATM and branch transactions increased 15% year-on-year to 330 million
- Capitec reported a 10% increase in gross loans and advances to R45.1 billion
- The bank created 1,629 new job opportunities for a total 13,069 employees
- Capitec Bank directors declared a final gross dividend of 800 cents per ordinary share, bringing the total dividend for the year to 1 250 cents per share.
Net transaction fee income, driven by a combination of the growth in Capitec’s active client base, expansion of the ATM and branch network and strong take-up of cellphone banking, increased by 30% year-on-year, the bank said.
Capitec said that more than 1.8 million clients use their banking app to gain free access to their accounts and statements or to do payments, transfers and pre-paid purchases at R1.50 per transaction.
“A core principle in our organisation is to act with the best interests of the client in mind. We opened 76 new branches during the financial year in order to alleviate pressure in high volume areas and to grow the brand footprint in higher-end shopping malls. 301 of the 796 branches trade seven days a week and all branches are open longer trading hours than the industry norm to ensure the highest level of client accessibility,” said Capitec Bank CEO, Gerrie Fourie.
Looking ahead, Fourie said Capitec would continue to grow client numbers, but will shift its focus towards optimising their existing client base, enhancing client service through innovative processes and business efficiencies and towards expanding their digital capabilities to ensure that the organisation remains agile enough to meet and exceed ever changing client needs.
On 24 March 2017, Capitec Bank announced its investment in Cream Finance Holding, a European online consumer loans company.
The bank will acquire an interest of 40% for €21 million in three tranches at nine-month intervals, subject to specific agreed performance measures being met.
“The partnership will provide us with an opportunity to gain experience in entering and operating in foreign countries, with a specific focus on advancing credit in the international and online environment. We are very excited about this investment and the opportunities it presents for us as we expand our interests beyond the borders of South Africa,” Fourie said.