{"id":812304,"date":"2025-02-21T05:13:39","date_gmt":"2025-02-21T03:13:39","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=812304"},"modified":"2025-02-21T05:13:44","modified_gmt":"2025-02-21T03:13:44","slug":"the-south-african-investment-that-turned-r1000-into-r2-1-million","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/812304\/the-south-african-investment-that-turned-r1000-into-r2-1-million\/","title":{"rendered":"The South African investment that turned R1,000 into R2.1 million"},"content":{"rendered":"\n

Capitec’s share price has grown monumentally over the last 25 years as it transitioned from a micro-lender to a fully fledged financial services provider with over 20 million customers.<\/p>\n\n\n\n

Since its listing in February 2002, Capitec’s share price has grown by 211,618%. This means R1,000 invested twenty-five years ago would now be worth R2.1 million.<\/p>\n\n\n\n

The story of Capitec goes back to 1997, when Capitec’s founding entity, PSG, acquired micro-lending businesses, including Smartfin and Finai.<\/p>\n\n\n\n

Amid a fragmented microlending industry with 2,500 players, PSG wanted to establish a dominant position.<\/p>\n\n\n\n

Following management changes in 2000, the microlending business was spun out as a subsidiary of PSG\u2019s banking business.<\/p>\n\n\n\n

Capitec was registered as a bank on 1 March 2001, with the company then listed on the Johannesburg Stock Exchange on 18 February 2002.<\/p>\n\n\n\n

Despite its current success, Capitec’s early days were characterised by major challenges, such as strict regulations, large capital requirements, and the dominance of much larger retail banks.<\/p>\n\n\n\n

Nevertheless, PSG’s equity capital helped Capitec overcome many of these challenges and continued on its growth path.<\/p>\n\n\n\n

Capitec focused on targeting unbanked South Africans through its single-status products, which were not changed based on income.<\/p>\n\n\n\n

The simplicity of its products and the transparency of its pricing convinced many people to also switch banks. <\/p>\n\n\n\n

When Capitec was formed, the group focused on four key areas that would always remain priorities: accessibility, simplicity, affordability and personalised service.<\/p>\n\n\n\n

It added that it had always been a priority for its clients to access their banking whenever they needed to. <\/p>\n\n\n\n

From the get-go, Capitec would open its branches from 08:00, which was an hour before any of the other banks did. They also stayed open later until 17:00, giving clients an extra 67 banking hours per month.<\/p>\n\n\n\n

Constantly evolving <\/strong><\/h2>\n\n\n
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Capitec’s Head Office in Stellenbosch, South Africa<\/figcaption><\/figure><\/div>\n\n\n

In 2003, the group launched Global One, giving customers four free savings accounts linked to their main savings account.<\/p>\n\n\n\n

Not only did these accounts help customers realise their savings goals, but they were also the first savings accounts that customers could name themselves.<\/p>\n\n\n\n

To make banking even more portable, the company built a computer in a silver aluminium case and carried it to wherever people were. This became known as the \u201cDie Tas Man.”<\/p>\n\n\n\n

The group’s bid to boost connectivity was further supported by introducing Internet banking in 2008, introducing simplified banking for its 2 million clients. Cellphone banking was launched a year later. <\/p>\n\n\n\n

2009 was also a critical year for the group, with it further stressing the need to back banking simplified amid a financial industry that was overly complicated.<\/p>\n\n\n\n

By 2011, the group had 3.7 million clients and began opening its branches on Sundays. The Capitec banking app would then launch in 2014, allowing clients to bank anywhere at any time. <\/p>\n\n\n\n

Capitec had 23 million customers by 2024, more than one-third of South Africa’s entire population. This shows that its strategy worked exactly as planned.<\/p>\n\n\n\n

The company is pushing into business banking following the acquisition of Mercantile Bank in November 2019, which has now been rebranded to Capitec Business.<\/p>\n\n\n\n

Capitec CEO Gerrie Fourie said that the group wants to transfer the simplicity and low-fee banking services it offers to retail clients to the business sector.<\/p>\n\n\n\n

Unlike many of the largest banks in South Africa, which focus on the highly competitive corporate banking space, Capitec Business is primarily focused on servicing SMEs and entrepreneurial clients.<\/p>\n\n\n\n

In another growth prospect, Capitec obtained its long-term insurance licence in the 2023 financial year. The company started offering life insurance in June 2024, with better-than-expected uptake.<\/p>\n\n\n\n

Underpinning all of these ambitions is a company that has seen remarkable growth in its financial metrics. <\/p>\n\n\n\n

In 2003, Capitec’s net income and headline earnings stood at R30 million in 2003. Fast forward to 2024, profit for the year and headline earnings reached R10.5 billion, showing growth of about 35,000%.<\/p>\n\n\n\n

Moreover, the group’s total dividend increased from 19 cents per share in 2003 to 4,875 cents per share, showing growth of roughly 25,000%.<\/p>\n\n\n\n

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Capitec share price growth<\/h2>\n\n\n\n
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Capitec revenue growth<\/h2>\n\n\n\n
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Capitec net income growth<\/h2>\n\n\n\n
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Capitec equity growth<\/h2>\n\n\n\n
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\n","protected":false},"excerpt":{"rendered":"

Early investors in Capitec have benefitted from a tremendous rise in the company’s share price over the last 25 years. <\/p>\n","protected":false},"author":95,"featured_media":812315,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[1798,20195,4671],"class_list":["post-812304","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-capitec","tag-gerrie-fourie","tag-psg"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/812304","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\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=812304"}],"version-history":[{"count":24,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/812304\/revisions"}],"predecessor-version":[{"id":812565,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/812304\/revisions\/812565"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/812315"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=812304"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=812304"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=812304"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}