{"id":195628,"date":"2017-08-31T09:38:23","date_gmt":"2017-08-31T07:38:23","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=195628"},"modified":"2017-08-31T09:38:23","modified_gmt":"2017-08-31T07:38:23","slug":"south-africas-bad-economy-is-helping-capitec","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/195628\/south-africas-bad-economy-is-helping-capitec\/","title":{"rendered":"South Africa&#8217;s bad economy is helping Capitec"},"content":{"rendered":"<p>Capitec plans to continue challenging South Africa&#8217;s big four banks, with the group remaining a popular choice for both customers and shareholders.<\/p>\n<p>Speaking to <strong><a href=\"http:\/\/www.reuters.com\/article\/us-safrica-banks-idUSKCN1BB0HM\" target=\"_blank\" rel=\"noopener\">Reuters<\/a><\/strong>,\u00a0Capitec chief executive Gerrie Fourie said that the bank is currently attracting\u00a0100,000 to 150,000 new customers a month.<\/p>\n<p>&#8220;Most of them we\u2019ve taken from other banks,&#8221; said Fourie. &#8220;The economy is helping us &#8211; people have started questioning why they have to pay banking costs.&#8221;<\/p>\n<p>The bank&#8217;s continued client acquisition saw it pass\u00a09 million retail customers in <strong><a href=\"https:\/\/businesstech.co.za\/news\/banking\/189420\/capitec-is-now-the-second-biggest-bank-in-south-africa\/\" target=\"_blank\" rel=\"noopener\">June<\/a><\/strong>, surpassing\u00a0Absa&#8217;s 8.6 million and rapidly approaching Standard Bank&#8217;s 12 million.<\/p>\n<p>The bank has also seen its share price rise by over 300% since 2012, and with an estimated market value of R103 billion, it is quickly closing in on fourth-biggest lender, Nedbank, which is worth R110 billion.<\/p>\n<p data-reactid=\"60\"><strong>Potential trouble ahead<\/strong><\/p>\n<p data-reactid=\"60\">However, Capitec&#8217;s low-cost model and growing market share could prove to be a potential risk for the bank, said industry experts speaking to Reuters.<\/p>\n<p data-reactid=\"60\">Unlike its rivals, the bank offers only unsecured loans to low-income earners and cannot count on other lending areas to counter any losses.<\/p>\n<p data-reactid=\"60\">This means that its aversion to\u00a0mortgage lending and vehicle finance (which unlike other banks saw it\u00a0insulated during the downturn) also cannot be relied on for alternative revenue streams.<\/p>\n<p data-reactid=\"60\">The amount of Capitec\u2019s loans in arrears at the end of December were up 24% compared with a year earlier, which at R2.86 billion, outstrips the 11% growth rate of its interest income.<\/p>\n<p data-reactid=\"60\">Similar results are expected when the bank reports its half-year results at the end of September.<\/p>\n<p data-reactid=\"60\">&#8220;The other banks might have a bit of a moat by having vehicle finance, housing loans and bonds and higher value loans,&#8221; said Momentum SP Reid banking analyst Brian Mugabe.<\/p>\n<p data-reactid=\"70\">&#8220;Their biggest challenge comes as they move up the value chain.&#8221;<\/p>\n<p data-reactid=\"71\">Nonetheless, Capitec has warned its bigger competitors that it plans to climb the income ladder &#8211; just not all the way up.<\/p>\n<p data-reactid=\"72\">&#8220;We designed this bank to service 90 to 95% of South Africa\u2019s banking public,&#8221; said Fourie. &#8220;The wealthiest 5% to 10% of the population we leave for the guys offering private banking services.&#8221;<\/p>\n<hr \/>\n<p><strong>Read:\u00a0<a href=\"https:\/\/businesstech.co.za\/news\/banking\/195052\/do-south-africas-banking-bosses-really-deserve-their-massive-salaries\/\" target=\"_blank\" rel=\"noopener\">Do South Africa\u2019s banking bosses really deserve their massive salaries?<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Capitec plans to continue challenging South Africa&#8217;s big four banks, with the group remaining a popular choice for both customers and shareholders.<\/p>\n","protected":false},"author":10,"featured_media":60339,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[1798,26,3482],"class_list":["post-195628","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-capitec","tag-headline","tag-reuters"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/195628","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=195628"}],"version-history":[{"count":14,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/195628\/revisions"}],"predecessor-version":[{"id":195682,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/195628\/revisions\/195682"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/60339"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=195628"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=195628"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=195628"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}