Capitec: ‘We’re retailers. We think client, then risk.’

When Michiel le Roux phoned to ask whether he wanted to help build a bank, Gerrie Fourie was working at Stellenbosch Farmers’ Winery. He knew the liquor distribution business well, but banking was entirely new to him.

It is a point he returns to several times during the conversation.

“We’re retailers. We think client, then risk,” he tells Jacques Conradie in the third episode of Building Conviction. “Bankers look at risk, risk, risk, and then client.”

Fourie was part of Capitec’s founding team in 2001, became chief executive in 2014 and retired as CEO in July 2025, moving into a non-executive role. By then, Capitec had more than 24 million clients and was South Africa’s largest bank by market capitalisation.

Much of the hour-long conversation explores how that client-first approach worked in practice.

Twelve years to be taken seriously

Capitec said from the start that it wanted to bank 95% of South Africans.

The market was sceptical, and for years treated the company as a microlender. Fourie reckons it took about 12 years for investors to properly understand what Capitec was doing.

He describes the bank’s early expansion as guerrilla warfare.

Its first real cluster of branches was not in a major city, and his explanation of why makes for one of the more interesting parts of the episode.

One card for everyone

Every client received the same gold card, regardless of how much they earned.

“Why do you have to classify clients?” Fourie asks. “All clients are the same; they need to be treated the same.”

Hidden fees and pricing laden with asterisks still clearly irritate him, as do banking hours designed around the bank’s convenience.

Capitec kept its fee structure to a handful of flat fees and opened its branches from 7am to 10pm.

“You do what your client wants,” he says.

He applied the same philosophy to keeping things simple. When Capitec bought Mercantile Bank, it inherited 64 products, and Fourie gave the team three weeks to cut the list. He reveals how many products remained, along with the rule of thumb he applies to product ranges more generally.

The 25% rule

Underlying all of this was a fixed capital rule: everything was priced to deliver a 25% return on equity, no more and no less.

Fourie resisted years of pressure to return capital to shareholders, arguing that this buffer helped Capitec weather both the 2018 short-seller attack and the Covid-19 pandemic.

When returns came in above target, the excess didn’t go to shareholders. He explains where it went instead.

Jacques Conradie, Peregrine Capital. Image: Supplied

Viceroy

The 2018 attack is where the conversation gets most personal.

Viceroy Research accused Capitec of concealing bad debts, and the bank’s share price fell by about 30% in a single day.

“The hardest part wasn’t the process,” Fourie says. “It’s the fact that you’ve built a business and they’re actually attacking your integrity.”

There was no playbook for dealing with it.

What comes next

Fourie handed over to Graham Lee in July last year and, after some time away, rejoined the Capitec board in August this year.

His view on retirement is straightforward: “You can strategically challenge things, but on detail, stay away.”

He is enthusiastic about what AI could mean for a business with as much data as Capitec.

A valuation that once took him three or four days can now be completed in about an hour, while credit committee reviews that previously ran to 40 pages and took two weeks can now be done in half an hour.

He also sees plenty of room to grow within the existing client base.

Capitec has about 26 million clients and nearly 900 branches, and accounts for roughly 40% of the personal banking market. Its market share in business banking, insurance and value-added services, however, remains in the low single digits.

After that, there’s international expansion.

The Conviction Card

Each guest ends by answering the same question.

Fourie concludes the episode with his Conviction Card: “If you believe in something, go and do it and execute on it,” he says. “Too many people talk and don’t deliver. It’s not ideas that count – it’s the people that go execute and do them.”

The full conversation is available on Building Conviction, Peregrine Capital’s podcast series, across leading podcast platforms, with new episodes released every few weeks.

Listen/watch

The full episode is also available on your favourite podcast platforms, and here.

This podcast is produced by Peregrine Capital (Pty) Ltd, an authorised financial services provider. The views expressed by speakers are their own as at the time of recording, may change without notice and do not necessarily reflect those of Peregrine Capital. Nothing in this podcast constitutes an offer, solicitation or recommendation to buy or sell any security. Peregrine Capital and its associated funds may hold positions in companies discussed, which listeners should bear in mind. Statements regarding strategy, targets or expected performance are forward-looking and involve risks and uncertainties; actual results may differ materially. Past performance is not a reliable indicator of future performance. Listening to this podcast does not establish a client or advisory relationship with Peregrine Capital. This episode was recorded on 14 July 2026.

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