{"id":822268,"date":"2025-04-28T07:05:20","date_gmt":"2025-04-28T05:05:20","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=822268"},"modified":"2025-04-28T07:05:25","modified_gmt":"2025-04-28T05:05:25","slug":"capitec-opening-the-taps","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/822268\/capitec-opening-the-taps\/","title":{"rendered":"Capitec opening the taps"},"content":{"rendered":"\n

Capitec has significantly increased its credit sales in South Africa, but further increases depend on US President Donald Trump’s actions.<\/p>\n\n\n\n

Following two financial years in which Capitec cut its credit sales to customers, Capitec significantly increased its credit offerings to customers in the 2025 Financial year.<\/p>\n\n\n\n

In the 2023 financial year from March 2022 to February 2023, the group opened its credit offerings to clients, taking a ‘brave’ stance following the Covid-19 pandemic.<\/p>\n\n\n\n

However, the bank’s CEO, Gerrie Fourie, admitted that the group landed in a mess due to the global crisis caused by Russia’s 2022 invasion of Ukraine.<\/p>\n\n\n\n

This resulted in higher inflation and, in turn, 15-year high interest rates.<\/p>\n\n\n\n

The group then cut back on lending in the 2024 financial year, with credit sales levels dropping year over year.<\/p>\n\n\n\n

In its most recent financial year, the picture slowly started to shift.<\/p>\n\n\n\n

In the first half of the year, Capitec’s credit sales growth remained below the FY2023 figures.<\/p>\n\n\n\n

However, in the second half of the financial year, the group opened up the credit taps to customers again, pushing sales up 23%, reaching a peak of R5.4 billion in December.<\/p>\n\n\n\n

Not only were credit sales higher, but so were credit applications, which increased by 33%.<\/p>\n\n\n\n

Fourie noted that the bank’s upgrade to Amazon Web Services improved the group’s credit offerings by increasing the speed and efficiency of credit services.<\/p>\n\n\n\n

He added that annuity disbursements drove 54% of the loan sales, which refers to credit facilities where customers pay off their credit and instantly receive access to more, such as a credit card.<\/p>\n\n\n\n

Credit card limit sales increased by 48% from R3.5 billion in the 2024 financial year to R5.1 billion. Credit card disbursements rose by 25% from R17.3 billion to R21.6 billion.<\/p>\n\n\n\n

Despite the increased gross loans and advances, the group’s overall credit impairment charge on loans and advances dropped by 6%.<\/p>\n\n\n\n

Capitec’s credit loss ratio dropped from 8.7% in FY24 to 6.9% in FY25, excluding the recently acquired international lender AvaFin.<\/p>\n\n\n

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Wait-and-see<\/strong><\/h2>\n\n\n\n

Capitec published a stunning set of results for the year, with headline earnings jumping by 30% to R13.7 billion. <\/p>\n\n\n\n

The group’s ROE also increased from 26% to 29%, partly due to the drop in the credit loss ratio.<\/p>\n\n\n\n

However, this doesn’t mean that the floodgates are open.<\/p>\n\n\n\n

When asked if he expects Capitec to increase loan disbursements despite the challenging economic environment, Fourie said that its actions will depend on those of US President Donald Trump.<\/p>\n\n\n\n

Trump threw global financial markets into a spin earlier this month announcing a global 10% tariff on exports that kicked in from 5 April.<\/p>\n\n\n\n

He also announced massive “reciprocal” tariffs on certain countries that had a trade surplus with the USA, including a 30% tariff on South Africa.<\/p>\n\n\n\n

The reciprocal tariffs have since been suspended for 90 days, but the 10% tariffs remain in effect.<\/p>\n\n\n\n

Additionally, Trump ignited a damaging trade war with China\u2014South Africa’s largest trading partner\u2014which carries dire consequences for global trade.<\/p>\n\n\n\n

As a result, the International Monetary Fund (IMF) slashed global growth prospects this week. South Africa did not escape the axe, with local GDP now expected to grow at a paltry 1.0%.<\/p>\n\n\n\n

Nevertheless, Fourie said that Capitec’s loan facilities have been agile for over 20 years and respond to the broader moves within the South African economy.<\/p>\n\n\n\n

The group is on high alert for South African industries affected by the US tariffs.<\/p>\n\n\n\n

He said that decisions are made at weekly credit meetings, and the bank could pull back in specific sectors if there are increased risks.\u00a0<\/p>\n\n\n

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Capitec CEO Gerrie Fourie<\/figcaption><\/figure><\/div>","protected":false},"excerpt":{"rendered":"

Capitec Bank has significantly increased its credit sales, but it will be keeping an eye on global markets and Trump’s trade war in navigating its next moves.<\/p>\n","protected":false},"author":95,"featured_media":541128,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[1798,2722],"class_list":["post-822268","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-capitec","tag-imf"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/822268","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=822268"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/822268\/revisions"}],"predecessor-version":[{"id":822371,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/822268\/revisions\/822371"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/541128"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=822268"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=822268"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=822268"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}