Capitec Bank Holdings has announced its unaudited financial results for the six months ending 31 August 2024, reflecting robust growth across key financial metrics. Headline earnings surged by 36% to R6.4 billion, compared to R4.7 billion in August 2023. This impressive growth continues the bank’s double-digit upward trajectory, with a notable 9% increase over the six months ending in February 2024, when earnings stood at R5.9 billion.
Capitec’s value-added services (VAS) and its mobile network offering, Capitec Connect, were standout performers, growing by 79% to R2.0 billion from R1.1 billion the previous year. The bank also declared a 36% increase in its interim dividend, rising to 2,085 cents per ordinary share from 1,530 cents in August 2023.
A key driver of this growth was net transaction and commission income, which increased by 19% to R6.9 billion from R5.8 billion in August 2023. Capitec’s expanding client base on its banking app grew by 21%, reaching 12.4 million users. Digital and card payment volumes also saw significant growth, contributing to 89% of total transaction volumes, up from 87% last year.
Capitec’s credit loss ratio saw a marked improvement, decreasing from 9.6% in August 2023 to 7.6%. This reduction reflects the bank’s strict lending criteria, which contributed to muted loan disbursements. Meanwhile, the group’s return on ordinary shareholders’ equity (ROE) rose to 29%, up from 24% in August 2023, driven by economies of scale and growing transaction volumes.
Interest income also contributed significantly, growing by 20%, with the current high-interest environment in South Africa playing a positive role. Additionally, Capitec’s funeral plan income rose by 14%, adding R91 million to its net insurance result, while net credit life insurance income remained stable.
Overall, the bank’s personal banking segment accounted for 49% of total headline earnings, strategic initiatives contributed 23%, insurance made up 24%, business banking represented 3%, and AvaFin accounted for 1%.
