Capitec is tightening the taps
Capitec has started tightening its lending amid the heightened economic flux caused by the US and Israel’s war in Iran.
This is according to Capitec Group CEO Graham Lee, who said the bank’s senior team meets at least once or twice a week to discuss its credit strategy.
In the financial year ending 28 February 2026, Capitec saw total loan disbursements grow by 34% to R98.3 billion.
Due to a massive increase in its loans, the group’s credit impairment charge on loans and advances increased by 21%, which was expected.
The group’s credit loss ratio jumped from 7.5% to 8.1%. All entities saw an increase in their credit loss ratio, with business banking up to 2.4%, personal banking up to 8.2%, and AvaFin up to 53.2%.
AvaFin was hard hit after introducing longer-term products with maturities of up to 4 months in Mexico and Spain during the year to assess the markets in these countries.
The group saw higher rolls into arrears in Mexico, Spain and Czechia, which increased the CLR.
Lee said the group had already started tightening credit granting near the end of the 2026 financial year.
The bank’s credit-granting criteria have also been tightened following the impact of the war in Iran, which broke out on 28 February, which was the bank’s last day in its financial year.
Lee said the bank is taking a prudent, but agile, approach to lending, with a small step back in the amount of credit it offers to its personal and business banking clients.
However, he added that the bank plans for various scenarios when preparing its lending approach, which factors in shocks, such as the Iran conflict.
Cash is not going away
Capitec’s results for the 2025 financial year showed that cash volumes were up 4% to R616 million. Send cash was also up 10% to R205 million.
However, the group noted that digital payments were up 25% to R2.953 billion. Card payments were also up 20% to R2.935 billion.
Despite digital and cash payments dominating the group’s payments, Lee said that the group is not done with cash.
The CEO, who replaced Gerrie Fourie in the top job last year, said that accessibility for its clients is key. Capitec will thus not limit the amount of cash offered to consumers.
Cash machines are also crucial for the group, which has over 8,000 ATMs across the country.
However, Lee admitted that the group is trying to entice customers away from cash into digital payments, which can offer greater security for customers and more data for banks.
Capitec results
The latest updates come amid a strong performance for the group, which recorded a 23% increase in headline earnings to R16.8 billion.
Notably, the group has started to benefit heavily from its diversification. Personal banking, which remains the group’s primary business, accounted for 41% of total headline earnings.
27% of the group’s headline earnings came from insurance, while fintech (value-added services and Capitec Connect) contributed 26%.
Business banking contributed 5%, while AvaFin contributed 1%. While traditionally a micro-lender for South Africa’s less wealthy, Capitec has also seen a 50% rise in clients earning over R50,000.
Amid strong performance, the group also announced a 23% dividend boost to 7,980 cents.
Loading ...