{"id":197438,"date":"2017-09-08T09:06:17","date_gmt":"2017-09-08T07:06:17","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=197438"},"modified":"2017-09-27T07:30:42","modified_gmt":"2017-09-27T05:30:42","slug":"capitec-has-just-kicked-nedbank-out-of-the-big-four","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/197438\/capitec-has-just-kicked-nedbank-out-of-the-big-four\/","title":{"rendered":"Capitec has just kicked Nedbank out of the ‘big four’"},"content":{"rendered":"

Capitec Bank Holdings passed Nedbank Group as South Africa\u2019s fourth-largest lender by value to extend a market-beating rally that has made it the country\u2019s best performing stock.<\/p>\n

The shares of Stellenbosch, South Africa-based Capitec rose 2% in Johannesburg on Thursday to close at R891.03, giving it a market capitalization of R103 billion ($8 billion) and extending gains this year to 28 percent.<\/p>\n

Nedbank climbed 0.9% to R205 for a market value of R102.1 billion, paring its decline in 2016 to 14%.<\/p>\n

Capitec\u2019s assets don\u2019t amount to even a 10th of those of Johannesburg-based Nedbank, which owns a retail and investment bank, wealth-management businesses and a stake in Africa\u2019s most geographically diverse lender.<\/p>\n

Capitec\u2019s stock has gained in all but one of the years since it began trading in February 2002 at about R2.60. That\u2019s the most among banks across emerging markets during the period and the best performer in South Africa\u2019s benchmark Top40 Index.<\/p>\n

\u201cCapitec is gaining retail clients at a rate that makes it bigger than Nedbank,\u201d said Patrice Rassou, head of equities at Sanlam Investment Management in Cape Town. The lender also grabbed market share when it launched its card business, which is \u201ca huge growth vector,\u201d he said.<\/p>\n

Originally a purveyor of unsecured lending, Capitec broadened its product range into savings and credit cards to defy an economy ravaged by political turmoil and growth that the central bank estimates will reach 0.5% this year.<\/p>\n

It has expanded faster than the nation\u2019s four biggest banks, adding 1.3 million customers in the last fiscal year alone to 8.6 million.<\/p>\n

\u201cCapitec\u2019s simple bank model, absence of brick-and-mortar branches, modern technology and high growth rate has appealed to investors both locally and abroad,\u201d said David Shapiro, the deputy chairman of Sasfin Wealth in Johannesburg.<\/p>\n

\u201cManagement was nimble and easily attacked the big banks in a segment of the market that they had overlooked or perhaps felt was too difficult or risky to service.\u201d<\/p>\n

\"\"<\/a><\/p>\n

Diminished Prospects<\/strong><\/p>\n

Earnings per share in the six months through Aug. 31 will probably increase as much as 18%, Capitec said on Sept. 6, extending a run that has seen its annual net income jump almost 130 times since 2003.<\/p>\n

Nedbank said on Aug. 2 that first-half net income declined 3.7%, weighed down by losses at Ecobank Transnational, which makes the bulk of its money in Nigeria.<\/p>\n

The company\u2019s run might be nearing an end, with Capitec trading at more than 20 times future earnings compared with less than 8 for Nedbank, according to Richard Hasson, a money manager at Electus Fund Managers in Cape Town.<\/p>\n

It is \u201cunlikely that they will deliver growth in earnings at similar levels to the past,\u201d he said. \u201cCapitec is overvalued relative to their growth prospects.\u201d<\/p>\n

\n

Read:\u00a0Capitec\u2019s share price gains are better than any bank in emerging markets \u2013 so why are people worried?<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Capitec Bank Holdings passed Nedbank Group as South Africa\u2019s fourth-largest lender by value to extend a market-beating rally that has made it the country\u2019s best performing stock.<\/p>\n","protected":false},"author":59,"featured_media":122607,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[29,26,1799],"class_list":["post-197438","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-absa","tag-headline","tag-nedbank"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/197438","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\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=197438"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/197438\/revisions"}],"predecessor-version":[{"id":201058,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/197438\/revisions\/201058"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/122607"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=197438"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=197438"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=197438"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}