CAPITEC REVISES GUIDANCE LOWER, HEPS TO FALL 82%

CAPITEC Bank Holdings yesterday revised its guidance lower, with the expectation that its interim earnings will plummet as much as 82 percent as credit impairments surged due to the disruption caused by Covid-19. In its trading update released in July, Capitec warned of an earnings decline of more than 70 percent. “The board now wishes to advise that a reasonable degree of certainty exists that, for the half-year to end-August, headline earnings per share (Heps) will be between 458.10 cents a share and 559.90c, representing a decrease of between 78 and 82 percent, compared to the 2 545c reported last year,” the group said. The bank said then its earnings were impacted by a loss of R404 million during the first quarter. The bank said the lockdown had resulted in increased credit impairment charges and lower loan sales and transaction volumes, which saw Capitec incurring a loss of R404m for the quarter to the end of May. Its credit impairment charge was 145 percent higher than expected, and the bank said this was predominantly due to R5.75 billion and R236 million in retail and business credit balances, respectively, rescheduled or granted payment breaks due to the lockdown. Capitec also expects its earnings per share (Eps) to be between 458.82c and 560.78c, representing a decrease of between 78 and 82 percent compared with 2 549c reported last year. The provision for credit impairments had increased by R3.3bn since February. The big slide in Heps was in line with the other big banks. |