PLODDING STEADILY ON
Capitec* results again showed a strong set of numbers but the one that really caught my eye was the cost-to-income ratio of 38%. That is staggeringly low, with the big four local banks all sitting with costto-income ratios around the mid-50s. There are two reasons for this very low number: f irst, huge growth as income from banking operations increased 40%, yet banking expenses were up only 20%. This leads to the second point, which is the bank’s centralised ICT infrastructure, which enables a very low cost branch network. This means cost increases can lag revenue increases, resulting in the low cost-to-income number. The other important f igure was the number of Capitec account holders, now 4.7m, up almost another 1m during the year and at pretty much the same growth rate as the previous year. This leaves the bank still some way off the biggest of the big four in terms of customers but ultimately Capitec will join the other four as South Africa’s fifth big bank.
Capitec Bank Holdings