Capitec has proved that it is easy to eat the big banks’ lunch. Dismissed earlier as just another grey microlender, Capitec now offers bank accounts as well as loans to 10.5-million people, 18% of the SA population. For several years it has had more main-banked clients than Nedbank, and it is now catching up with Absa, Standard Bank and FirstRand. Capitec CEO Gerrie Fourie says he is very happy to see that the Capitec base continues to grow at the rate of 109,000 clients a month. In the six months to August the bank’s fee income was enough to pay off 90% of its operating costs. The fees make up 47% of its net income.

Even in a subdued climate Capitec’s earnings were up 20% to R2.46bn. The higher transactional fee income is useful, as it helps the bank to not be so dependent on interest income from loans. However, it also leaves Capitec vulnerable — clients can move to potentially cheaper options that come onto the market, such as TymeDigital and Bank Zero. But for now clients ...

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