Credit where it’s due
Capitec Bank: Credit where it’s due
Capitec has launched a riskier credit card product, but it won’t venture into full private banking any time soon
It was dismissed three years ago as the next African Bank collapse waiting to happen. Some took the not much kinder view that it was a bank for the unbankable. Many analysts show more enthusiasm for the still-conceptual Discovery Bank. But Capitec Bank’s growth over the past year shows both that it still has plenty of runway and that its lending policies have been conservative and astute. The bank’s headline earnings growth of 18% to R3.8bn would be considered no more than satisfactory, at least compared with the 26% last year. But Jaap Meijer, insurance analyst at Dubai-based Arqaam Capital, says it has made him think that FirstRand no longer deserves a premium rating after its pedestrian 7% growth. And while the big four all have about 20% of the market, Capitec has a market share of just 4%. Analysts are divided on Capitec’s rating. Three have a "buy" recommendation on the stock, while another three have a "sell" recommendation. Capitec CEO Gerrie Fourie says that a full 92% of t...
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