Capitec CEO sells shares worth R11 million 

Capitec CEO Gerrie Fourie sold over 6,000 of the company’s ordinary shares on 3 November. 

The company announced in a SENS announcement on Monday, 6 November, that Fourie had completed an on-market disposal of 6,439 Capitec shares.

The highest price for the shares was R1,784.57, while the lowest price was R1,780.64. At the time of writing, Capitec’s share price is R1,871.45.

This brought the total value of the transaction to R11.47 million. The company did not provide a reason for Fourie’s transaction.

This comes after Capitec reported successful first-half earnings for the six months through August 2023. 

The company’s operating profit before tax increased by 6% to R5.89 billion from R5.55 billion in the comparative period last year.

Headline earnings per share increased by 9% to 4,072 cents from 3,738 cents. Earnings per share increased by 9% to 4,068 cents from 3,739 cents.

Interim ordinary dividends increased by 9% to 1,530 cents per share from 1,400 cents per share.

The company’s net asset value (total equity) increased by 13% to R39.35 billion from R34.81 billion.

These positive results followed concerns over bad debt that could hurt the company’s performance.

Earlier this year, the bank said that the economic climate in South Africa had been characterised by high interest rates and inflation above the government’s target.

“This led to consumers being under financial pressure, which impacted the retail bank loans and advances and resulted in a higher credit impairment charge and credit loss ratio,” the company said in a trading update.

During H1 2023, the company tightened its credit granting criteria to address the risks to the loan book amidst the challenging economic environment.

Changes to the granting criteria during the reporting period included discontinuing short-term access facilities and cutbacks on clients who increased their instalments to income ratio by more than 30% during the past six months. 

These changes appear to have borne fruit, as the impact of the adjustments to granting criteria was to decrease loans and limit sales by 32%. 

“We can adjust the term to maturity of our retail loan book more quickly than mortgage or commercial lenders because of the comparatively shorter term of our loan book,” the company explained in its results today. 

As a result, retail loan sales and disbursements decreased by 9% to R24.2 billion (H1 2022: R26.5 billion). 

The tightening of access facility criteria resulted in a significant decrease in the new access facility limits granted to R3.8 billion (H1 2022: R10.5 billion). 

In addition, access facility limits were cut by more than R3.0 billion, and access facility disbursements decreased to R7.3 billion from R9.9 billion. 

The lower-risk credit card disbursements grew from R6.3 billion to R8.0 billion. Term loan sales decreased by 14% from R10.4 billion to R8.9 billion.

In an interview with Daily Investor, Fourie said Capitec’s more stringent lending requirements will stay in place until South Africa’s macroeconomic environment allows more flexibility.