NEWS ANALYSIS: Big four worry about Capitec taking clients
Customer growth across the big four banks has analysts wondering where Capitec finds its clients
Bank shareholders have been approaching the four largest banks about upstart Capitec’s customer numbers, worried that it is eating into their customer base and stealing market share. But customer growth across the big four has analysts wondering where the Stellenbosch-based lender, which aims to cover all of its operating costs from transactional fees by 2020, finds its clients. Capitec reported 1.3-million new customers in the year to February, swelling the ranks to 8.6-million, 46% of whom had Capitec as primary banker. The increase in customers, coupled with the expansion in Capitec’s ATM and branch network and customers’ increased use of self-service banking, has resulted in a 30% increase to R3.9bn in transaction income. This covered 72% of operating costs. "Capitec’s ability to further grow unsecured loans and advances is constrained by their large market share, so the growth driver for Capitec has become growth in transactional revenue," says Bradley Preston, chief investment...
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