Capitec’s winning plan: Sell only 12 products instead of 64 and make more money

When Capitec acquired Mercantile Bank in 2019, then-CEO Gerrie Fourie tasked his team with reducing its offerings from 64 products to 10 in three weeks.

After a comprehensive analysis of Mercantile’s product suite, the Capitec team trimmed the offering down to 12 products.

In doing so, Fourie and his team learned that prioritising good delivery was better for the business in the long term.

Fourie recounted this anecdote in an interview with Peregrine Capital, where he detailed lessons he learned during his 11-and-a-half-year tenure as Capitec CEO.

Capitec’s acquisition of Mercantile in 2019 was considered a milestone moment for the bank, as it launched Capitec’s move into the business banking market.

The transaction dates back to 2018, when Capitec was crowned the winning bidder to acquire 100% of Mercantile.

The formal share sale and purchase agreement was executed in 2019, with Capitec paying R3.56 billion to acquire the company.

At the time, Mercantile’s assets were valued at R2.76 billion, including its full-service business and commercial bank, its rental finance business, and a payment solutions joint venture.

This was an important transaction for Capitec, as Mercantile allowed the banking giant to fast-track its entry into business banking.

In acquiring Mercantile, Capitec established a diversified commercial platform without needing to build one from scratch.

For years, the bank had focused exclusively on retail banking for individual customers, and the acquisition meant it gained 68,000 business and commercial clients overnight.

However, along with these clients, Mercantile came with 561 employees and 12 business centres spread across the country.

At the time it was acquired, Mercantile had a gross loan portfolio of R10.78 billion and R11.74 billion in client deposits.

This meant that bringing Mercantile into Capitec’s fold was a complex process, requiring extensive evaluations of how the two businesses would fit together.

From 64 products to 12

Capitec’s goal was to disrupt the local business banking market by applying the same four core fundamentals that allowed it to become a challenger in the personal banking space.

These four fundamentals are: simplicity, affordability, accessibility, and personalised service.

Capitec wanted to use these principles to build a no-frills, digital-led business banking solution that removed friction and saved business owners time and money.

To do so, Capitec had to overhaul Mercantile’s product suite – and that’s exactly what the bank did.

Fourie recalled this period in the bank’s history, saying he and his team were very strict about ensuring that whatever products they offered, they had to be done well.

“We were very strict, because if clients say, ‘I need this, I need this, and I need this’, then eventually you’re sitting with five or six products, but you don’t do anything well,” he said.

“We were very adamant that you do one or two products, do it exceptionally well, penetrate deeply, and focus on it.”

To illustrate this point, Fourie explained that when Capitec acquired Mercantile, the business bank offered 64 products.

“I said in a meeting, “When I’m back in three weeks’ time, you’ll have 10 products, and they said it’s impossible,” he recalled. “Three weeks later, I was there, and we settled on 12.”

Fourie said he completed a full analysis of all the products Mercantile offered and found that many were used only once or twice a month.

“We closed that and said, ‘Okay, here’s the 12, we’ll focus on the 12, and we’ll do it well’,” he said.

Fourie explained that this lesson extends across Capitec’s entire portfolio, saying that focus is critical to running a successful business.

“Focus is critical if you want to be successful: Focus on a particular segment, focus on a particular client type, and really deliver on that,” he said.

“People always want to do 10 things. Rather do two or three things well, finish it, and then carry on to the next two or three.”

This strategy has worked out well for Capitec. Today, Capitec’s Business Banking division boasts 686,000 clients – ten times the amount Mercantile had when it was acquired.

This segment also contributed R871 million to Capitec’s headline earnings in its 2026 financial year, with operating income of R3.20 billion.

Fourie’s lesson on simplicity has been key to this growth, with Capitec’s Business Bank now known for offering only one account to all business and commercial clients.