<\/p>\n
Capitec Bank expects headline earnings to grow 18-20% for the six months ended August, driven by client growth, higher transaction volumes, and higher interest rates.<\/p>\n
However, in anticipation of tougher economic times, the company increased its credit impairment charges in both personal and business banking segments, signalling it expects deteriorating credit conditions ahead and defaults to rise as South Africa\u2019s economy weakens.<\/p>\n
Capitec, the South African bank with the largest customer numbers at 26 million, said the existing loan book looks sound, and personal banking lending income still grew.<\/p>\n
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\u2018Excitingly low\u2019 market shares offer runway for Capitec\u2019s growth \u2013 CEO
Capitec clients ramp up credit use
Capitec forecasts up to 27% surge in interim earnings<\/p>\n
The 25 basis point repo rate increase in May supported Capitec as higher interest rates enable it to charge borrowers more on loans, but does not have to raise rates on deposits proportionally. The bank also earns interest on cash reserves at the higher repo rate.<\/p>\n
Business banking showed substantial growth in active clients as well as lending and transactional volumes. Capitec has been moving into business banking since 2019, having started as a retail bank in 2001. The number of point-of-sale merchants and use of Capitec Pay continued to grow.<\/p>\n
Its life and funeral cover insurance products performed well, supported by lower claims ratios and growth in investment income.<\/p>\n
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Capitec said its operating expenses remained well-controlled, led by technology-driven efficiencies, supporting profitability and returns.<\/p>\n
Capitec share price<\/p>\n
#Capitec #expects #earnings #rise #deteriorating #credit #conditions<\/p>\n","protected":false},"excerpt":{"rendered":"
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