When looking at what new banks on the block such as Discovery Bank or TymeBank were offering it was important to look at the total package, said Capitec CEO Gerrie Fourie.
On the topic of Discovery, which unveiled a little more detail on what it will offer late last month, Fourie said: “You need to look at the total offering. They say they are going to come in at 5% [on transactional account balances] but if you look at their monthly fees on three tiers … they are completely different from our rate. We still haven’t seen the full pricing of their products. I can’t comment at this stage – we’ll have to wait and see.”
Regarding Tyme’s banking fees, Fourie said that certain of Tyme’s fees were lower than Capitec’s and some were higher.
“Tyme is looking only at the transactional side. It still needs to go into fixed deposits, savings, insurance and credit. They are just offering a basic transactional side. Their cash deposits are limited to Pick n Pay shops. Their only functionality is Android phones – an Apple phone can’t use Tyme. There are shortcomings. You need to look at the total package,” he said.
Tyme, Bank Zero and Discovery are all looking at the digital channel to gain advantage.
On the other hand, Fourie said that Capitec believed that: “A combination of branch, digital and personal communication is the right strategy for South Africa.
“We are sitting with 5.2 million clients that are on digital … Then there are 6.6 million clients – the average for the past six months – that are still coming into our branches. A big portion of our clients are still coming into our branches. About 3.5 million digital clients have come into the branch. It shows you that there is still a big need for a branch.
We believe the right offer for South Africa is to have a combination of branch, digital and personal communication.
“We believe those three are the right elements to come to the right offer.
“We are trying our best to convert the 6.6 million clients to the digital platform but they are still coming to the branch.”
In November last year Capitec agreed to buy Mercantile Bank from Caixa Geral de Depósitos for R3.2 billion as part its move into business banking.
“We are waiting for the Competition Commission. We have submitted our application. It will probably take two to three months. We are basically at a stage of waiting. Let’s see by June or July if our application has been approved. Then we can really start working on mercantile.”
Capitec’s total client base has grown to 11.4 million clients.
On the outlook for Capitec’s client base, Fourie said that in the first two months of the year the company had added 500 000 clients.
“March is also on 200 000-plus [new clients]. It’s a very strong growth in the past three months.”
Fourie said the reason for the reduction in Capitec’s bank fees from the start of March was due to efficiencies through self-help digital offers and not due to new competitors.
“There is a big drive to move people away from digital or self help.”
Reuters reported that the reduction in bank fees would see Capitec reduce its annual revenue by R360 million to R380 million.
Capitec launched its credit card in September 2016 and it now has a R3.6 billion credit card book and 450 000 credit card holders.
“We are acquiring 14 000 to 15 000 credit card clients a month.”