Capitec Bank’s chief executive, Gerrie Fourie, is upbeat about the bank’s future even though its annualised basis headline earnings were down by 27% to R4.6-billion, from last year’s R6.3-billion.
For the first six months of the financial year, while the country was in lockdown, headline earnings decreased by 78% to R650-million compared with the prior year. During the second six months of the year ended February 2021, headline earnings were R3.9-billion.
But the bank has made substantial gains in the market, shown by its total active client base increasing by about 160 000 clients a month. As of 28 February, the client base was 15.8-million, rising from 13.9-million in 2020.
With these gains, the bank could also pay dividends of 1 600 cents an ordinary share, well up from last year’s 755 cents a share.
Speaking to the Mail & Guardian this week on his media tour, Fourie said the focus had not been on the pandemic but innovation and sustainability — and that it was evident in the numbers.
“The pandemic presented the biggest challenge since our inception, but it also allowed us to adapt and think differently. We saw a fundamental shift in how clients do their banking, and we proactively enhanced our banking app with new functionalities.”
Fourie focused on the positives the bank had recorded in a year that was difficult for many.
Total net transaction fee income increased by 9% year on year from R7.4-billion to R8.1-billion.
Transaction volumes increased by 17% to 5.3-billion. The average cost per transaction decreased from R1.62 to R1.52 in the 2021 financial year.
The Mail & Guardian asked him about the bank’s focus and intentions:
What is the bank’s focus on technology and innovation, and how will that affect the bottom line?
“South Africa is very cash dependent, and we need to get them to use electronic payments and use the digital app. That is why we’ve spent quite a lot of planning on enhancing our digital application and offerings.
“As a result, we have seen this massive growth in our digital side. We’ve now got 8.6-million clients using our digital offer, and it has grown by more than three million in the past two years.”
How will Capitec grow the business sector after having acquired Mercantile Bank just last year?
“If we use the same principles and approach that we employ in retail, we believe that there’s an opportunity for SMEs [small and medium enterprises]. If you combine that with a very strong digital client experience, we can create something unique.
That’s what we are building. And hopefully, if everything goes according to plan, we can launch that model next year.
“We believe there’s a significant need for small and medium-sized businesses to open up their accounts and transact with ourselves.”
What about the bottom line with new products and ventures during these uncertain times?
“What I’ve learned in business is that don’t look at the bottom line. Look at satisfying the client needs and then the bottom one will follow.
The big focus is on Covid-19 and surviving this time. What is the Capitec plan?
“From about July last year, we shifted our mindset to growth, innovation and delivering on our client’s needs.
“But the mindset has moved completely to growth, and that you can see in our figures. We grew by 18% in the last six months versus the previous years. I think it’s a tremendous performance. So we’re not talking Covid.”