Capitec ups dividend by 36%

Stellenbosch-headquartered Capitec recorded a 36% growth in earnings to R6.4 billion for the six months ending 31 August 2024, the group announced on Tuesday.

A gross interim dividend of 2 085 cents has been declared for the period under review – 36% higher than the corresponding period in 2023.

Headline earnings per share increased to 5 544 cents compared to 4 072 cents in the corresponding period in 2023.

Capitec’s credit loss ratio has improved to 7.6% in the interim period (2023: 9.6%).

The group generated a return on equity of 29% – up from 24% in the prior period. Capitec attributes the increase to muted loan disbursements and the growing return on equity on transaction and value-added services income arising from economies of scale as volumes grow.

The composition of its total headline earnings per business was as follows:

• Personal banking – 49% (August 2023: 45%),
• Strategic initiatives – 23% (August 2023: 18%),
• Insurance – 24% (August 2023: 32%),
• Business banking – 3% (August 2023: 5%); and
• AvaFin – 1% (August 2023: nil)

Gerrie Fourie, the lender’s CEO, said in a statement that Capitec has continued to invest significantly since 2020 despite the tough economy.

“Political stability, including positive sentiment about the government of national unity, normalised inflation and reduced interest rates, promote economic confidence and sets the scene for future growth.”

One of the highlights of Capitec’s interim results is the growth in value-added services income, which jumped by 73% to R2 billion in the period under review.

The number of clients using its value-added services, which include bill payments, prepaid electricity and airtime, vehicle licence renewal, and buying retail or Showmax vouchers, has grown by 16% to 10.7 million.