Capitec sees massive boost in profit as it hits 10.5 million customers in SA

Capitec has published its financial results for the six months ending on 31 August 2018.

The bank posted a 20% increase in headline earnings to R2.46 billion, alongside a 20% increase in headline earnings per share, to R21.28.

Its net transaction fee income (non-lending) increased from R2.4 billion to R3.1 billion – and now makes up almost half of its total net income, covering 90% of its operating expenses.

Operating costs also increased from R3.2 billion to R3.5 billion on the back of a growth in staff, branches and investment in IT infrastructure costs.

Total profit for the period hit R2.46 billion, up 20% from the R2.05 billion reported in the prior year.

Notably, transaction growth increased by 25% and the bank indicated that it now has 10.5 million active clients – meaning that it is now likely one of the biggest banks in the country by this metric.


Capitec said that strong client growth was one of the key drivers of its performance.

“We continuously improve efficiencies to ensure clients receive the best service and are able to be in control of their money. We attracted 109,000 additional active clients every month for the last six months,” it said.

It added that self-service banking transactions (including the banking app; internet banking; unstructured supplementary service data or USSD, which is mostly used by clients who do not have smart phones; in-branch self-service terminals and dual note recyclers) has increased in volume by 27% to 295 million at the end of August 2018 (August 2017: 231 million).

“For the six month period ended August 2018, 146 million transactions had been performed via our banking app. The app was used by 1.8 million clients – an increase of 62% from August 2017,” it said.

“Continuous refinements to our credit strategy resulted in an improvement in the quality of the loan book. Arrears up to 3 months decreased by 10% and bad debts recovered increased by 14% for the 6 months since 1 March 2018.”

Moving forward, Capitec said that it planned to expand its product offering to include business banking.

It added that this may include the acquisition of Mercantile Bank Holdings Limited – for which it submitted a formal bid on 31 August 2018 and is currently awaiting the outcome.

The directors declared a gross interim dividend of 630 cents per ordinary share (2017: 525 cents).

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Capitec sees massive boost in profit as it hits 10.5 million customers in SA