Capitec is closing the taps

 ·8 Sep 2023

Capitec says it is being more stringent over giving loans amidst the challenging economic environment.

In a voluntary trading statement for the six months that ended 31 August 2023, the bank said that the economic climate in South Africa had been characterised by high interest rates and inflation above the government’s target.

“This led to consumers being under financial pressure, which impacted the retail bank loans and advances and resulted in a higher credit impairment charge and credit loss ratio,” the group said.

During the period, the group tightened its credit granting criteria to address the risks to the loan book amidst the difficult economic environment.

Looking positively, the group said that provisions for expected credit losses are conservative as of 31 August.

In addition, the recent headline inflation number of 4.7% for July and the 0.6% GDP growth in Q2 have led to optimism within the group.

The net transaction fee income and funeral plan income has also boosted earnings and profit.

Net transaction fee income performed well due to the growth in transaction volumes and the expansion of new products.

Growth in the active funeral plan book due to high sales, client retention and cold collection rates.

The group expects its headline earnings per share to increase by between 8% and 10% to 4,035 cents and 4,110 cents per share for the period under review.

Group earnings per share are also expected to increase by between 8% and 10% to 4,037 cents and
4,112 cents per share.

Financials20222023 % Change
Headline earnings per share3 736 cents per share4 035 to 4 110 cents per share8% to 10%
Group earnings per share 3 738 cents per share4 037 and 4 112 cents per share8% to 10%

Capitec will present its financial financial results for the period on or about 28 September 2023.

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