No longer the new kid on the block: Capitec earnings surpass R10-billion
Once it was the newcomer in the banking industry, but Capitec has grown to become a case study in banking success, boasting an active client base of 22 million, earnings of R10.6-billion, and 11.2 million app users for the year to the end of February.
Transaction volumes increased 21% to 9.9 billion, driving a 29% increase in transaction and commission income to R14.8-billion. Gerrie Fourie, chief executive officer of Capitec, says this growth aligns with the bank’s strategy of shifting the market towards digital banking.
Strategic initiatives such as “value-added services”, payments and Capitec Connect contributed R2.9-billion in net income, while the insurance business contributed R3-billion, and the relatively recently launched business banking division brought in R478-million in profit after tax.
Capitec app users increased by 180,000 a month and registered more than 11 million logins a day – that’s more than 500,000 people using the app every hour. Fourie says the bank’s strategy has remained focused on the future.
“Over the past three years, we’ve invested R6.3-billion in re-platforming our systems and migrating our data to AWS Cloud services, developing innovative payment solutions and building three new businesses,” he says.
Card payments increased by 30% to 2.5 billion, which means the Capitec card was used 6.6 million times a day across South Africa and abroad.
The bank introduced Capitec Pay, the first Api-based payment solution in South Africa, which enables secure card-free online shopping by entering a cellphone number and authenticating it using the Capitec app. Capitec Pay processed 134 million transactions with a value of R26.7-billion.
Clients with inflows of more than R15,000 a month into their Capitec accounts have increased by 17%.
Fourie says more than 2.9 million clients have net salaries of more than R15,000 paid into their accounts, with 600,000 clients depositing salaries of more than R50,000 a month.
The bank implemented a new online banking platform that allows clients to sign up remotely in minutes with no paperwork, for a monthly fee of R50 and with the same low transaction fees as personal banking for all businesses, regardless of size.
After its success in South Africa, Capitec is looking to expand in other countries.
In March, the bank got the green light from the South African Reserve Bank to increase its ownership of Cyprus-based Avafin, an international online consumer lending group, from 40% to 97% at a price of about R530-million.
Fourie says Avafin presents a strategic opportunity to diversify the bank’s income sources and build on its experience in foreign markets.