Capitec posts 16% jump in full-year HEPS

Capitec, the best performing stock on the JSE, has reported a 16 percent increase in headline earnings per share (HEPS), showcasing a positive path forward for the company. CEO Gerrie Fourie discussed the market's response to the company's recent results and the exciting opportunities on the horizon during an interview with CNBC Africa. Looking ahead, Fourie emphasized a long-term strategic vision for Capitec, focusing on the next three to five years rather than short-term gains. The CEO highlighted new business ventures, including a revamped digital business banking offer and the expansion of insurance offerings. With a client base of 22 million and recent acquisitions like Everfin, an online lending business operating in five countries, Capitec is poised for significant growth. Moreover, Fourie addressed concerns about the current interest rate environment and its impact on the business. While high interest rates can pose challenges, Capitec has diversified its income streams, with 72 percent derived from non-lending activities. The CEO pointed out positive signs in the economy, such as declining food inflation and overall stability. Discussing impairments, Fourie acknowledged a year-on-year increase of 36 percent but noted improvements in the second half of the year. Capitec's focus on risk management and credit quality has led to better performance in the retail sector. Additionally, the CEO expressed confidence in the resilience of small and medium-sized enterprises, highlighting opportunities for growth in the secured side of the business. As Capitec expands its presence beyond South Africa, notably through the Aberfan transaction in multiple countries, the company remains committed to optimizing its ecosystem and digital offerings for existing clients. While exploring opportunities in new markets, the focus remains on enhancing services for the current client base and driving digital innovation. Addressing questions on the scalability of physical branches in an increasingly digital landscape, Fourie emphasized the importance of branches in providing personalized service and product uptake for clients. By balancing both digital and physical channels, Capitec aims to maintain a flexible and responsive approach to meet customer needs. In terms of hiring, Capitec is actively recruiting, particularly in tech and data roles, to support its growth strategy. With a need for additional staff, the company is focused on meeting client demands and ensuring operational efficiency. When asked about the affordability of Capitec's shares and the possibility of a share split, Fourie stated that it is not currently under consideration. While the company continuously evaluates different strategies, there is no immediate plan for a share split. Looking ahead, Capitec's strategic vision, focus on innovation, and commitment to customer service position the company for continued success and growth in the competitive financial landscape.