Capitec has published its annual results for the year ending 29 February 2020, with the group once again showing strong growth.<\/p>\n
Operating profit before tax increased by 14% to R8.06 billion, from R7.08 billion in the prior year. Headline earnings per share increased by 19% to 5,428 cents per share, from 4,577 cents per share in the prior year.<\/p>\n
Earnings per share increased by 18% to 5,400 cents per share, from 4,571 cents per share in the prior year; Total dividends per share decreased by 57% to 755 cents per share, from 1,750 cents per share in the prior year.<\/p>\n
Headline earnings were up 19% to R6.28 billion.<\/p>\n
The group reported that it added an average of 200,000 clients a month last year, with the bank also attracting higher-income clients and advanced better quality loans. The bank now has 13.9 million active clients.<\/p>\n
“The branch focus is on client interaction and more complex, specific banking needs. We now have 6.7 million retail clients making use of our digital channels (banking app and USSD) up from 5.2 million in 2019.<\/p>\n
“Some clients prefer to visit branches and have face-to-face interactions with service consultants.”<\/p>\n
Capitec said that it now has 852 retail branches across the country in convenient locations. Approximately 7.8 million (2019: 6.6 million) retail clients visit the retail branches every month.<\/p>\n
Dividends\u00a0<\/strong><\/p>\n Capitec said that its ordinary dividend policy is to pay out 40% of headline earnings.<\/p>\n “As Capitec\u2019s capital base and liquidity ratios remain strong, it was the intention of the board to declare the final dividend this year,” it said.<\/p>\n However, in line with the South African Reserve Bank’s recent guidance note, the bank said that it would not be declaring a final ordinary divided<\/p>\n “The South African Reserve Bank published Guidance Note 4\/2020 on 6 April 2020 in which banks are directed to act prudently in preserving capital and focusing on financial and economic stability,” it said.<\/p>\n “This is due to the absence of appropriate factual information to determine the full impact of the Covid-19 pandemic on the South African economy.<\/p>\n “There is a clear expectation communicated in the Guidance Note that banks should not declare ordinary dividends for the time being.<\/p>\n “After extensive deliberation, the board decided to support the guidance of the Reserve Bank and decided against the declaration of the final ordinary dividend.”<\/p>\n Response to Covid-19<\/strong><\/p>\n The Covid-19 pandemic will have a massive impact on South Africa\u2019s economy, Capitec said.<\/p>\n “The severity of the impact on the economy will depend on the length of the national lockdown. We are working together with the South African Reserve Bank and other stakeholders in an attempt to minimise the financial impact on our clients and employees.”<\/p>\n Capitec said that it has\u00a0implemented several initiatives to support employees and clients.<\/p>\n This includes procuring and distributing over 2,000 computers to allow client care and key support service personnel to work from home.<\/p>\n 50% of branches are kept open during the lockdown period while employees continued to earn their full salaries, it said.<\/p>\n “Capitec committed substantial donations to various organisations for disaster relief during this pandemic, and contributed to client savings through the industry-wide waiver of SASWITCH fees to all clients, as well as waiving the full cash withdrawal fees for SASSA clients.<\/p>\n “We continually review the financial position of our credit clients on an individual basis and implement the necessary remedies where possible to assist clients with their cash flow during this difficult period. Executive management monitors the national crisis and adapts our response on a daily basis.”<\/p>\n
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