COMPANY ANALYSIS: Capitec going from strength to strength
The bank has reported headline earnings growth in the high double digits, and its best credit performance in three years
Rumours of Capitec’s demise due to its exposure to the highly volatile unsecured lending market were greatly exaggerated. Despite desperately weak consumer sentiment, the bank has just reported its best credit performance in three years. For the six months to August, arrears as a proportion of gross loans and advances fell to 5.4% from 6% as customer accounts in arrears declined 2% to R2.49bn and recoveries rose marginally.Capitec is enjoying average deposit growth of R1bn per month, with growing acceptance of the Capitec brand. Its number of clients swelled to 9.2m during the six-month period – raising total retail deposits 28.7% to R55.4bn by the end of August. It is slowly weaning itself off funding from large institutional investors — known as wholesale funding — which comprised just R7bn, as growth in loans and advances was backed by a larger share of fixed retail deposits and profits. "Retail deposits growth continued to surpass that of wholesale, posting a 25% increase for ca...
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