Capitec is rocking

Capitec reported strong results for its financial year through February 2024, as the company’s earnings were boosted by growth in digital clients transacting digitally.

Capitec released its results for the year ended 29 February 2024 today, which revealed a strong performance for the bank.

Net interest income increased by just under 2% to R7.74 billion. This was impacted by higher credit impairments in the period.

However, this was recouped through the company’s net transaction and commission income, which rose by almost 30% to R14.79 billion.

Funeral insurance income grew by 27% to R1.3 billion, while credit life insurance income increased by 13% to R1.9 billion from R1.7 billion in 2023.

This brought the company’s total income from operations after credit impairments to R27.32 billion – an over 16% increase compared to 2023,

Capitec achieved a profit of R10.57 billion for the year, up over 15% from 2023.

This brought basic earnings per share to 9,156 cents, up from 7,933 the previous year. Headline earnings per share also got a 16% boost to 9,171 cents, with headline earnings growing to R10.6 billion.

Capitec’s active clients grew by 10% to 22.2 million, and its retail bank app users grew by 19% to 11.2 million.

Fully banked clients – clients who perform more transactions and therefore contribute more to income – increased to 7.8 million from 6.9 million in 2023.

The number of clients using our value-added services grew by 17% to 9.8 million, contributing to an increase in income from these services.

The retail bank’s gross loans and advances increased by 2% to R83.8 billion (2023: R82.3 billion), and the provision for ECL grew from R18.8 billion to R21.4 billion.

The stage 3 loan book grew to R22.3 billion at the end of February 2024 (2023: R18.5 billion).

Arrears contributed R223 million to the growth, up-to-date reschedules that have not rehabilitated contributed R717 million, and the default book contributed R2.7 billion.

The stage 2 loan book decreased from R13.5 billion at the end of the 2023 financial year to R12.9 billion primarily because balances migrated to stage 3 but also because the migration from stage 1 to stage 2 slowed during H2 2024.

The bank’s total coverage ratio increased from 22.9% at the end of February 2023 to 25.5% at the end of February 2024.

Capitec’s ordinary dividend policy is to pay out 50% of headline earnings. 

A final gross dividend of 3,345 cents per share (2023: 2,800 cents per share) was declared on 22 April 2024, bringing the total dividend for the 2024 financial year to 4,875 cents per share (2023: 4,200 cents per share).