Capitec’s headline earnings soar to R8.4bn

Capitec, South Africa's third-largest bank by market value, has reported an impressive 84% jump in full-year headline earnings per share. This substantial growth has been met with a final dividend of 24.40 cents and a special dividend of 15 cents, showcasing the bank's commitment to its shareholders. In a recent interview on CNBC Africa, Capitec CEO Gerrie Fourie discussed the bank's financial performance, future plans, and strategies for sustained growth. When questioned about the analyst's view on Capitec's dividend yield being lower than some peers, Fourie defended the bank's dividend policy, stating that they are satisfied with paying out 50% of earnings. He highlighted the importance of capital preservation for future investments and growth opportunities. Fourie emphasized the confidence in Capitec's growth prospects and the need to maintain capital adequacy. He mentioned that the bank's strong dividend payout of 51 cents for the full year reflects this confidence. Fourie also addressed the bank's operating earnings, attributing the growth to both new business and the provisions released from the previous year. He pointed out a 17% growth in the income line, showcasing the bank's robust performance despite challenges like COVID-19 and social unrest. Capitec has seen significant client growth, with 2 million new clients and a rise in digital clients from 6 million to 10 million. The CEO underlined the importance of focusing on primary banking clients and enhancing client engagement to drive further growth. With a keen eye on expanding its market share, Capitec aims to optimize its 18 million clients by offering a full range of products and services. The bank is incentivizing clients to use its products through rewards and benefits, encouraging them to make Capitec their primary banking institution. As part of its growth strategy, Capitec is looking to open more branches to better serve its clients and capitalize on opportunities for upselling and cross-selling. Fourie mentioned plans to increase the number of branches from 150 to potentially 50-60, emphasizing the crucial role of branches in enhancing customer experience and brand visibility.