Capitec has published its financial results for the six months ending August 2018 – showing both strong revenue, and client growth.
With the bank now attracting 109,000 additional active clients every month, Capitec confirmed plans to expand its product offering to include business banking.
It said 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.
Speaking to BusinessTech, Capitec CEO Gerrie Fourie said that it is not that often that a business bank enters the local market.
“We believe that we understand South Africa, so we will be focusing on SMEs,” Fourie said.
“So if we are successful – as you know there are four bidders – we will probably spend the first year/18 months going through different strategies to optimise and discuss the products that are needed.”
“The goal is to see if we can do the same thing business banking as we did to retail banking in South Africa,” he said.
Additional bidders include Nedbank and two consortiums — the Public Investment Corp (PIC) and microlender and microinsurer Bayport Financial Services, and Grindrod Bank and Arise.
Fourie added that Capitec has done its due diligence and is waiting for a decision to be made on who the successful bidder will be.
“If it’s not us then we will build,” Fourie said.
“You are quicker to market (if the bid for Mercantile is approved) because you have an established business, while if you build you have to build for two or three years and only then can you got to market. So that’s the two options – build or buy.”
Other new developments
Another major new development focus is Capitec’s new funeral plan offering which launched in May this year, said Fourie.
Under the plan clients only contribute what they can afford, and a single contract can benefit up to 21 dependents.
A voluntary pause option allows policyholders to put their policy on hold for a maximum of six months if they are under financial strain, while new-born premium waiver benefit celebrates additions to clients’ families at no cost for up to six months.
Fourie said that Capitec is very happy with the results so far and that it is in line with expectations.
He said that Capitec will also be focusing on its credit offerings over the coming months.
“We are also looking at our credit side, how can we enhance our credit side, and provide a full offer to our client base – so we will be looking in those areas for next year.”