Capitec opening the taps

Capitec has significantly increased its credit sales in South Africa, but further increases depend on US President Donald Trump’s actions.

Following two financial years in which Capitec cut its credit sales to customers, Capitec significantly increased its credit offerings to customers in the 2025 Financial year.

In the 2023 financial year from March 2022 to February 2023, the group opened its credit offerings to clients, taking a ‘brave’ stance following the Covid-19 pandemic.

However, the bank’s CEO, Gerrie Fourie, admitted that the group landed in a mess due to the global crisis caused by Russia’s 2022 invasion of Ukraine.

This resulted in higher inflation and, in turn, 15-year high interest rates.

The group then cut back on lending in the 2024 financial year, with credit sales levels dropping year over year.

In its most recent financial year, the picture slowly started to shift.

In the first half of the year, Capitec’s credit sales growth remained below the FY2023 figures.

However, in the second half of the financial year, the group opened up the credit taps to customers again, pushing sales up 23%, reaching a peak of R5.4 billion in December.

Not only were credit sales higher, but so were credit applications, which increased by 33%.

Fourie noted that the bank’s upgrade to Amazon Web Services improved the group’s credit offerings by increasing the speed and efficiency of credit services.

He added that annuity disbursements drove 54% of the loan sales, which refers to credit facilities where customers pay off their credit and instantly receive access to more, such as a credit card.

Credit card limit sales increased by 48% from R3.5 billion in the 2024 financial year to R5.1 billion. Credit card disbursements rose by 25% from R17.3 billion to R21.6 billion.

Despite the increased gross loans and advances, the group’s overall credit impairment charge on loans and advances dropped by 6%.

Capitec’s credit loss ratio dropped from 8.7% in FY24 to 6.9% in FY25, excluding the recently acquired international lender AvaFin.

Wait-and-see

Capitec published a stunning set of results for the year, with headline earnings jumping by 30% to R13.7 billion.

The group’s ROE also increased from 26% to 29%, partly due to the drop in the credit loss ratio.

However, this doesn’t mean that the floodgates are open.

When asked if he expects Capitec to increase loan disbursements despite the challenging economic environment, Fourie said that its actions will depend on those of US President Donald Trump.

Trump threw global financial markets into a spin earlier this month announcing a global 10% tariff on exports that kicked in from 5 April.

He also announced massive “reciprocal” tariffs on certain countries that had a trade surplus with the USA, including a 30% tariff on South Africa.

The reciprocal tariffs have since been suspended for 90 days, but the 10% tariffs remain in effect.

Additionally, Trump ignited a damaging trade war with China—South Africa’s largest trading partner—which carries dire consequences for global trade.

As a result, the International Monetary Fund (IMF) slashed global growth prospects this week. South Africa did not escape the axe, with local GDP now expected to grow at a paltry 1.0%.

Nevertheless, Fourie said that Capitec’s loan facilities have been agile for over 20 years and respond to the broader moves within the South African economy.

The group is on high alert for South African industries affected by the US tariffs.

He said that decisions are made at weekly credit meetings, and the bank could pull back in specific sectors if there are increased risks.