VICEROY RESEARCH’S REPORT
Getting to grips with Capitec claims
Viceroy Research’s report contains a number of explosive allegations against Capitec, including that its bad debts are massively understated and it should be placed into curatorship. Do these accusations hold water? Business Day explores. • Capitec should write off R11bn to reflect the real bad debts on its book. Viceroy claims that Capitec "materially misrepresents the balance of its unpaid loans by consistently rescheduling these loans through the issuance of new loans". Capitec’s rescheduled loans have indeed spiked in recent years, but these are provided for as if clients were in arrears. Accordingly, Capitec’s provisions for doubtful debts increased 33% in 2016 and another 16% in 2017 to R5.9bn, covering 13.1% of gross loans and advances. "A rescheduled loan is not considered a new loan, so we don’t charge any additional fees. But by law it is a new agreement, which reflects the client as being up-to-date," says Capitec CEO Gerrie Fourie. Capitec does not issue new loans to rep...
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