Financial services group PSG, which took a hit on Tuesday following a Viceroy research report on Capitec, has thrown its full support behind the bank, saying that it is a world class company.<\/p>\n
PSG Group is the largest shareholder in Capitec with a 30.7% interest, and Capitec is also PSG Group\u2019s largest investment.<\/p>\n
On Tuesday morning, Viceroy published the\u00a0report<\/a>, titled\u00a0Capitec: A Wolf in Sheep\u2019s Clothing<\/em>, calling the bank a loan shark headed for insolvency.<\/p>\n The research report said that its analysis pointed to predatory lending practices from Capitec, where clients would be pushed to take out new loans to pay off the old ones, while being charged initiation fees and incurring other costs.<\/p>\n This, Viceroy said, was clouding Capitec\u2019s true impairment liabilities on its loan book, which it said was sitting at around R11 billion and could push the bank to the brink of insolvency, much in the same vein as African Bank years before.<\/p>\n \u201cWe consider Capitec to be uninvestable,\u201d it said, while calling for the Reserve Bank to step in and put the bank under curatorship.<\/p>\n