Capitec clients ramp up credit use

A surge in credit card usage, coupled with a zero-fee international offering, featured prominently in Capitec’s results for the year ended 28 February 2026.

This set of results marks the first full-year performance under chief executive Graham Lee, who succeeded Gerrie Fourie in July last year.

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The Stellenbosch-headquartered group’s credit card book grew 32%, driven by a 44% increase in spending on existing credit limits, alongside a similar rise in newly approved or increased limits.

Growth was particularly strong among younger clients, with credit card uptake among young adults rising 147%.

Denker Capital equity analyst Craig Metherell says the composition of growth in the card book is particularly notable.

“[This] has been driven by growth in high income earners [who] tend to use the product as a transactional tool rather than a credit tool, [which] typically results in better credit loss outcomes.”

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Anchor Capital’s Keagan Higgins notes that the broader trend in Capitec’s results reflects a more balanced earnings base, with non-interest income now a meaningful earnings contributor.

“Within non-interest income, we are seeing Fintech and Insurance growing much faster than the core lending book and becoming a more meaningful part of earnings,” he says.

At the same time, the distinction between new credit extension and ongoing usage is becoming more important.

Capitec saw strong growth in repeat usage – effectively annuity-style disbursements from existing limits – which points to a more engaged client base and more predictable income streams, compared with growth driven purely by new limit sales.

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Capitec is also using its credit card offering to differentiate on pricing, particularly for international transactions.

Lee, speaking during a post-results interview, says the bank’s zero-fee structure – which includes no international transaction fees and no forex commission – is built into its model rather than supported elsewhere in the business.

Instead, the card is designed to drive broader client engagement. “Those clients are the stickiest and use us for more of the other services.”

Even though the group makes a “thin profit” on these transactions, it brings these clients into the fold, tracks them and retains them, he adds.

Analysts say this approach aligns with Capitec’s broader strategy of building an ecosystem where usage – rather than lending margins alone – drives returns.

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Sanlam Private Wealth investment analyst Gary Davids notes that the shift towards transaction-based income makes the group more resilient through the cycle.

“Usage based revenues [payments, value-added services and mobile] tend to be less cyclical than unsecured credit; fintech volumes may soften, but they rarely cliff in tough times, unlike lending,” he says.

However, he cautions that this changes the nature of risk. “The trade-off is higher platform execution and conduct risk, as success increasingly depends on ecosystem scale and operational discipline rather than traditional banking spreads.”

Growing competition

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Competition in the card and payments space is also intensifying, particularly as banks and fintech players target the same customer base with low-cost, digital-first offerings.

“Competition in the lower end of the market is intensifying as Shoprite and Pepkor, along with other players, seek to capture an increasing share of a customer’s wallet,” Metherell says.

Davids says players such as Discovery Bank, Old Mutual Bank, GoTyme Bank and Pepkor are all competing for customers across the income spectrum, while incumbent banks are focused on defending and growing their own retail franchises.

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Despite this, analysts say Capitec’s scale and cost advantage continue to support its position.

“Transactional volumes and income are still growing, which suggests the model is holding up, even as fee pressure begins to emerge,” says Higgins.

Metherell points out that Capitec has proven to be “very innovative and dynamic, driven by their relentless focus on client centricity”.

“By providing what their customers want – and when they want it – they have been able to defend their share in this space … as well as providing clients with increased value through rewards, lower fees and simpler products.”

Davids adds that Capitec – with its approximately 26 million client base – operates at a level that newer challengers struggle to replicate.

“This lets Capitec keep prices low, while still delivering attractive returns, especially as it turns more customers into primary relationships.

“Something to keep in mind is that Capitec continues to appeal to income earners higher up the curve as well,” he adds.

This broadening of the client base comes as the macroeconomic backdrop becomes more uncertain.

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Stress scenarios 

Capitec is preparing for a more uncertain environment, Lee says. The group continues to run multiple stress scenarios, but has recently adjusted these to reflect rising global and local risks.

“The positive scenario we’ve now pulled back to zero and the severe scenario – we’ve increased that now to 20%.”

Despite the more cautious stance, Lee says the group remains within its risk appetite.

Analysts are of the view that Capitec is now entering a period where credit conditions are starting to “normalise” after a period of strong growth.

Denker Capital’s Metherell notes that global macro developments remain a key risk, particularly for South African consumers.

“We would keep a keen eye on global macro developments as prolonged uncertainty in oil markets will have an impact on the South African consumer,” he says.

Higgins points out that although non-interest income now makes up a larger share of Capitec’s revenue, it does not eliminate risk entirely.

“A higher non-interest income contribution means less reliance on lending margins and more exposure to transactional and insurance-type income. But this is still linked to the consumer. If market conditions weaken, activity slows. So [even though] it is more resilient, it is not immune.”

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