PLOD­DING STEADILY ON

Finweek English Edition - - INVESTMENT -

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

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