Short-seller Viceroy’s attacks on Capitec have no validity, Reserve Bank deputy governor Kuben Naidoo said. The central bank had confidence in the lender’s audited financial statements and that it was prudent in setting aside money to cover potential defaults, Naidoo, who is also the registrar of banks, said in Parliament on Wednesday. Capitec’s share price plunged earlier this year after Viceroy issued a report accusing the bank, which caters mainly to lower-income consumers, of reckless lending, inadequate provisioning for bad loans and the artificial inflation of loan repayments and new loans through loan rescheduling. The share price has since recovered after regulators backed Capitec, which has accused Viceroy of using its research to drive the shares down. Shorting involves selling borrowed shares and then buying them at a lower price. The Reserve Bank believed that Capitec’s provisioning model was prudent, given the nature of its business and that rescheduled loans were a rel...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.