End of era as Stassen retires from Capitec

Co-founder helped grow company to third-largest bank in SA in terms of market capitalisation

Riaan Stassen, the man who shook up SA’s banking industry when he co-founded Capitec Bank is retiring from the company at the end of May.

Stassen, who has served as nonexecutive chair of the bank since stepping down as CEO in 2013, played a leading role in growing Capitec into the thirdlargest bank in SA in terms of market capitalisation in just 18 years. Capitec’s market capitalisation was about R153.332bn at Thursday’s close.

During this time, Capitec transformed from a microlending business, with assets of R409m in 2002, to a mass market retail bank with assets of more than R100bn at last count.

Capitec has 11.4-million clients more than Nedbank and is catching up with Absa, Standard Bank and First National Bank.

The bank’s headline earnings in the year to end-February rose 19% to R5.3bn, a better growth rate than any of its main rivals.

Anthony Clark, an independent analyst at Small Talk Daily Research, said that Stassen’s exit marked the end of an era for the bank.

“I don’t see it being negative for the company, but it is the closing of a chapter, which was marked by dynamic growth in the company, made billionaires out of many individuals and fundamentally changed the nature of affordable banking, benefiting millions of poor and low-income households in SA,” Clark said.

Avior Capital banking analyst Harry Botha said Stassen had contributed greatly to the business and played a pivotal role in growing and shaping it into the financial institution it is today.

The group said on Thursday: “Riaan played an integral role in the establishment and success of the bank from 2001 to 2013, when he retired as CEO of Capitec and Capitec Bank.”

Stassen has been with the bank during its toughest times. In January 2018, Capitec became the second JSE-listed company after Steinhoff to face the scrutiny of a Viceroy report, when the obscure research firm published its report entitled “Capitec A Wolf in

Sheep’s Clothing”.

Capitec’s share price reacted immediately, losing more than a quarter of its value within days. The market, however, quickly discounted most of the findings in the report and its share price recovered.

Capitec, in which the Mouton family’s investment group PSG holds a 30.7% stake, said seasoned executive Santie Botha would take over as chair of the boards of both Capitec and Capitec Bank from June 1.

Botha is chair of Curro Holdings and Famous Brands, as well as a nonexecutive director at Telkom.

Botha has served on the boards of Liberty Holdings, Imperial Holdings, Tiger Brands, MTN Group, Absa and Unilever.

Clark said it was always “quite sad” when an emblematic founder such as Stassen stepped down. “Companies never feel the same after the founders exit the business.

“They tend not to have the same level of dynamism under a corporate culture as under an entrepreneur founder.”

Clark said that it was not uncommon for founders, when they left, to dispose of some shares in order to fund new ventures or just to diversify their assets. “Often a lot of a founders’ wealth is tied up in the business,” he said.

“One can assume for portfolio and asset diversification some share sales from Stassen may be forthcoming after his departure, but they now need not be disclosed as he will not be an officer of the company.”

Although Clark said Stassen’s retirement was part of the natural corporate progression, he did not expect this would be the last word from the banking pioneer.

“I can’t see a guy with that stature and experience just sitting on the golf course.”