Capitec, a leading South African bank, has reported a 19% increase in core earnings to R9.5 billion for the six months to August. This growth is attributed to the bank's diversified services, including personal and business banking, financial technology, and insurance operations. The bank's active client base has increased by 7% to 26.6 million, with full-service banking clients growing by 11% to 10.4 million.
The bank's growth is notable amidst global uncertainty. Capitec's CEO, Graham Lee, emphasizes the bank's focus on its clients, stating that the approach was to remain calm and focused on making a meaningful difference for its over 26 million clients and diversifying revenue. The bank has also reported a cost-to-income ratio of 36%, a decrease from 40% a year ago, as it continues to invest in its technology and digital banking offerings.
Capitec's digital banking services have driven growth, with the number of clients using the Capitec app in the previous month increasing by 18% to 16.5 million. Digital transaction volumes have also risen by 26% to 662 million. Additionally, the number of clients using digital payments, such as Apple Pay and Google Pay, has increased by 68% to 2.4 million, with spending through these services growing by 87% to R52.1 billion.
The bank's lending book has also grown, with personal banking loans exceeding R100 billion for the first time. Income from loans has increased by 9% to R11.4 billion, driven by growth in products such as credit cards and term loans. Capitec's financial technology operations have also seen significant growth, with net income increasing by 30% to R2.7 billion.
The bank's insurance business has reported a 22% increase in core earnings to R2.5 billion, with the net insurance result growing by 28% to R3 billion. This growth is driven by an increase in credit life insurance and funeral cover policies. The bank's active credit life insurance policies have increased to 2.2 million, while the funeral book has grown to 3.8 million active policies covering over 17 million lives.
Capitec's business banking services have also seen significant growth, with core earnings increasing by 52% to R609 million. The number of business banking clients has more than doubled to 686,000, with 237,000 small businesses using the Entrepreneur account. Merchant accounts have also grown by 66% to 141,000, while credit extended to businesses has increased by 37% to R35.5 billion.
Looking ahead, Capitec remains focused on expanding its payment and financing offerings. The bank has recently changed its name from Capitec Bank Holdings Limited to Capitec Limited, reflecting its broader focus on financial services beyond traditional banking. The bank's core focus remains on simplicity, affordability, accessibility, and a personalized client experience, with over 26.6 million active clients.
Key points
- Capitec's core earnings have increased by 19% to R9.5 billion.
- The bank's active client base has grown by 7% to 26.6 million.
- Digital transaction volumes have increased by 26% to 662 million.
