Capitec’s profit hike

2010-09-30 00:00

CAPITEC Bank remains firmly on an aggressive investment path, having grown headline earnings per share by 58% to 340 cents for the six months ended August 31, 2010, amid tough market conditions.

The bank’s profit grew to R283 million — up 59% year on year.

The expansion drive has come at a cost as “bad debts written off” rose during the period.

However, although net loan impairments rose 56% to R403 million, Capitec CEO Riaan Stassen told The Witness that Capitec’s net loan impairment expense to average gross loans and advances dropped to six percent from 7,6% at the end of August 2009.

He added that loans past due (in arrears) have only grown by R62 million compared with a R3,8 billion growth in the gross loan book since August 2009.

“One needs to be very careful when looking at arrears. We have done very well on arrears, in relation to the growth in our loan book. We have been very prudent in our provisioning and opted for a conservative approach to provisioning,” said Stassen.

He said KZN continues to perform well, adding that the new branches opened in the province all broke even within the first four months.

Capitec now boasts about 2,5 million active clients — a 42% increase over the 12 month period.

Stassen said although they have increased their ATM footprint, Capitec advises customers to draw from retailers and branches in order to minimise the withdrawal costs and security risks.

 

 

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