Has Capitec dodged the bad-debt bullet?
The bank has been on a tear in the 20 years since its founding — the share has rocketed 192,757%. But as the economy stagnates, investors may be nervous about an outfit that has built its fortune on pricey credit and low-cost banking for a high-risk market. Can it prove the sceptics wrong?
It hardly needs saying that it’s tough being a South African right now. Whether you’re a consumer, a taxpayer, a business owner, an investor or a sports fan, the scoreboard is decidedly grim — the Springboks’ performance in France so far notwithstanding.
Load-shedding, a stagnant economy, rising interest rates, a cost-of-living crisis and sky-high unemployment have taken a toll across the board — from blue chip companies such as Pick n Pay, which will make its first ever interim loss, to former high-flying start-ups such as Transaction Capital, where a bad debt pile-up at its SA Taxi lending business wrecked earnings and crunched its share price. ..
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