WAITING ON DETAILS
Capitec’s* trading update for the six months ending June sees HEPS coming in 18%22% higher. This sent the stock up 6% at one stage as the expectation was a much more modest 13% for the full year. The bigger picture is that growth is slowing – the previous full year saw HEPS up around 35% (itself down on previous years of +50% growth). The slowdown in growth is, in part, due to the bank’s size (a company can’t grow at massive numbers forever) but also certainly due to a rise in bad debts. That bad debt part of the equation is what everybody wants details on when results come out in late September. On current metrics the stock is looking cheap – but let’s wait for those bad debt details.
Capitec Bank Holdings