Capitec strategy pays off, bad loans plunge
Capitec’s lending policies, which were tightened two years ago, have started to pay off for the bank as it unveiled its best credit performance since 2014 in a weak economic environment. Loans in arrears rescheduled during the six-month period plunged 15% to R1.4bn as Capitec prevented customers from restructuring their loans for a second or third time. Credit losses also improved as the new policy, which it put in place during February 2015, bore fruit, and it extended loans to higher quality customers, resulting in slower growth in loans and advances. “We have always advanced and priced loans according to the individual-risk profiles of our clients. We continuously verify and update the trends in the marketplace,” said Capitec chief financial officer André du Plessis. “Where we see stress, we cut back, while we open up in areas where we see opportunities. Pricing is continuously updated, which gives us the opportunity to provide unsecured credit at interest rates from as low as 12...
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