Capitec has issued a voluntary trading statement that shows headline earnings per share (HEPS) will increase 14%-16% for its year to end-February, as it saw a reduction in bad debt.
Its share rose as much 4.74% on the news and by 3.30pm was up 4.39% to R2,124.28.
The company said the growth was driven by a strong performance during the second half of the 2024 financial year following subdued growth during the first.
It recorded double-digit growth in net transaction and commission income fuelled by growth in clients transacting digitally, and client adoption of its value-added services and new payment channels.
Value-added services include buying electricity or data, sending money and paying bills on the app.
Funeral insurance income increased on good client retention, while collection rates were stable.
The bank said tighter credit criteria meant lower bad debt in the second-half compared to the first. “The lower charge in conjunction with the conservative growth in the loan book led to an improved credit loss ratio.”
In its half-year to end-August the bank reported a 62% surge in its bad debt impairment to R4.8bn.
In October it said clients earning less than R10,000 were most affected by inflation and petrol price increases, resulting in it cutting lending to this group then.
Capitec expects HEPS of 9,049c-9,208c compared to the restated 7,938c for the previous year.
Capitec is SA’s largest retail bank by customer numbers, with the total number of active clients at 21.1-million.
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