Why Capitec is concerned about international telcos
Capitec Bank has reported a 27 per cent fall in headline earnings per share for the year ended February. This is from the prior comparable period. The bank has however, more than doubled its final dividend, from the previous year. Capitec Bank CEO, Gerrie Fourie joins CNBC Africa for more.
Tue, 13 Apr 2021 15:51:11 GMT
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AI Generated Summary
- Capitec Bank more than doubled its final dividend, reflecting a positive outlook and strong growth moving forward
- The bank saw significant growth in clients, adding four million new clients over the past two years, with a focus on digital space
- Despite challenges in credit demand from SMEs, Capitec Bank remains optimistic about opportunities in the transactional and digital space
Capitec Bank CEO Gerrie Fourie recently sat down with CNBC Africa to discuss the bank's performance amidst the economic challenges posed by the COVID-19 pandemic and the current low interest rate environment in South Africa. The bank reported a 27% fall in headline earnings per share for the year ended February, but more than doubled its final dividend, reflecting a positive outlook and strong growth moving forward. Fourie highlighted the bank's focus on managing COVID-19 in the first half of the year, ensuring the safety of clients and staff, and transitioning to a digital space. This strategic shift resulted in significant growth, with the bank adding four million new clients over the past two years, bringing its total to 15.8 million clients. Additionally, the bank saw a surge in active funeral policies and income derived from funeral transaction fees, with a 37% market share in new policies. Fourie acknowledged the challenges posed by the low interest rate environment and economic pressures in South Africa but remains optimistic about opportunities in the transactional and digital space. He also emphasized the bank's cautious approach to lending and building its business bank, including recent acquisitions. Despite challenges in credit demand from small and medium enterprises (SMEs), Fourie noted that the national loan guarantee scheme had limited uptake as businesses remained cautious amidst uncertain economic conditions. Looking ahead, Fourie discussed the increasing competition in the banking sector, particularly with the entry of international players, and emphasized the need to focus on consumer needs. He also addressed the growing interest in Bitcoin and blockchain technology, expressing caution about the real value of cryptocurrencies but highlighting the potential of blockchain technology for various applications. Overall, Fourie's discussion highlighted Capitec Bank's strong performance and strategic focus on growth and innovation amid challenging economic conditions.