Capitec Bank grows customer base by 13% to 19mn

Capitec Bank, the largest retail bank in South Africa with a customer base of 19 million, has reported a significant increase in customer numbers and earnings in the six months leading up to August. The bank's headlining earnings per share showed a boost of almost 20%, indicating strong financial performance. However, despite the positive results, the market reaction has been somewhat lukewarm, with some investors expressing concern over the bank's growth projections. In an exclusive interview with CNBC Africa, Gerrie Fourie, the Chief Executive Officer of Capitec Bank, addressed some of the key points driving the market sentiment. He acknowledged that the market may have expected higher growth rates, particularly in transactional income, which saw a lower increase of 8% due to the bank's decision to reduce fees and enhance customer loyalty programs. Fourie emphasized that prioritizing customer satisfaction and long-term relationships was a fundamental principle guiding Capitec's decisions. Despite the market response, Fourie remained confident in the bank's solid foundation and commitment to maintaining a client-centric approach. He highlighted the importance of prudent financial management, including provisions for potential risks, which contributed to the bank's overall stability and resilience. Regarding the economic environment, Fourie commented on the stability of Capitec's consumer base, noting consistent trends in cash reserves and deposit growth. He emphasized the bank's focus on digital banking services, with over 57% of clients utilizing digital platforms. This shift towards digital banking reflects a strategic direction aimed at fostering sustainable client behavior and driving long-term growth. Looking ahead, Fourie outlined plans for continued customer expansion, targeting quality banking clients and digital users. With a current growth rate of 164,000 new clients per month, Capitec aims to optimize its customer base and enhance product offerings to drive further growth. Additionally, Fourie discussed the bank's business banking segment, highlighting plans to integrate and enhance digital platforms to provide value and build relationships with small business clients. He emphasized the importance of investing in technology and data skills, noting the challenges in finding qualified talent within the industry. Capitec's focus on recruiting and developing skilled professionals aligns with its strategy to innovate and adapt to changing market dynamics. In conclusion, Capitec Bank's robust performance and strategic outlook position it favorably for future growth and expansion. While facing market uncertainties and economic challenges, the bank's commitment to customer-centric operations and innovative solutions sets a strong foundation for long-term success.