Capitec Bank Holdings expects to report higher earnings for the first half of the financial year due to lower credit loss ratios and as net transaction and commission income, including value-added services, contributing to strong growth in nonlending income.
The group’s headline earnings per share for the six months ending August are expected to be R50.90-R54.97, an increase of 25%-35% from the R40.72 reported a year ago.
Earnings per share were also expected to increase by 25%-35%, the group said on Friday.
The first half of 2023 was characterised by high credit impairment charges due to the effects of high inflation, elevated interest rates, load-shedding and a tough economic climate. These factors contributed to subdued single digit year-on-year growth in earnings and headline earnings for the six months ended August 2023.
Improving credit impairment charge and credit loss ratios contributed to the 22% year-on-year growth in earnings and headline earnings for the second half of the 2024 financial year.
Earnings and headline earnings during the second half of the 2025 financial year will therefore be compared against a higher base, Capitec said.
Lower credit loss ratios had persisted into the 2025 financial year and net transaction and commission income including value-added services had continued to contribute to strong growth in nonlending income, it said.
Effective May 1, Capitec acquired an additional shareholding in international online consumer lending group Avafin Holding. From this date Avafin was thus treated as a subsidiary and 97.075% of its profit for the period was included in the group’s income statement.
Before May 1, 40.66% of Avafin’s profit for the period was included as Capitec’s share of income from an associate.
Capitec expects to publish first-half results on October 1. Its share price closed up 1.42% at R2,732.25 on the JSE on Friday.
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