Most people opening a new bank account, and many who are fed up with the big four, are turning to Capitec. In the first quarter of 2019, in spite of new competition from TymeBank, it added a further 720,000 customers. Almost half of them are in the 21-35 age bracket and were likely to be opening their first bank account, and about a quarter are aged 20 or younger. Just 28% are 36 or older. Capitec now has 11.4-million clients, more than Nedbank, and is catching up with Absa, Standard Bank and FNB. Its 19% increase in headline earnings in the year to February 2019 to R5.29bn trumped all its rivals. With its higher dependence on unsecured lending, Capitec was hit by the new IFRS 9 accounting standard, which requires earlier recognition of bad debt. Capitec CEO Gerrie Fourie says this will push up the cost-to-income ratio from historic low levels of 36%. There will also be further capital expenditure on machine learning to improve the loan-granting procedures and client service in gene...

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