Capitec ‘stable’

Capitec Bank said customer numbers are stable after allegations by short seller Viceroy Research that it was hiding losses – charges SA’s biggest provider of unsecured lender denied.

“Initially, there were some jitters, but it quickly stabilised and clients are very supportive of the bank,” Capitec CEO Gerrie Fourie said yesterday. “We opened more than 8 000 new client accounts on the day after the news broke.”

Capitec’s stock yesterday rebounded from four days of losses that wiped 25% off its market value as concerns over Viceroy’s report eased. The three-person firm, led by a former UK social worker and two young Australians, on Tuesday accused the lender of refinancing defaulted loans with new debt.

The bank described the analysis as one-sided and inaccurate and laid a complaint against Viceroy with the stock-market regulator.

While analysts at Deutsche Bank AG and Arqaam Capital have suggested Capitec allow for an independent investigation to put the allegations to rest, the lender’s CEO said this isn’t being considered.

Capitec is “100% confident” it won’t need to restate its finances, said Fourie, who bought stock on Wednesday after the price declined.

The bank will respond further to Viceroy’s allegations “as soon as information becomes available in the next few days.”

SA’s central bank said this week it has no evidence to suggest the lender’s stability is in question, while S&P Global Ratings said its assessment of Capitec is unaffected by the Viceroy report or subsequent market reaction.

Futuregrowth Asset Management, SA’s biggest specialist fixed-income money manager, also said Capitec is adequately provisioned and will continue to be one of the lender’s funding partners.

“Capitec is a stable, healthy alternative lender, and our research has not caused us to be concerned about their solvency, asset quality or liquidity,” the money manager said yesterday. –