Capitec, the digital bank with more than half of South Africa as clients, increased headline earnings 30% to R13.7 billion as its diversification initiatives over recent years started to unlock value for its clients and the bank.
The share price surged 7.1% to R3 350.77 on the JSE Wednesday afternoon after the release of the results for the year to February 28, while the JSE All Share Index was only up by 0.28%, which indicated that investors were also optimistic about the bank’s prospects.
Over the past five years, the bank’s journey has included the introduction of business banking, value-added services (VAS), Capitec Connect, and insurance under its own insurance licence. This diversification leveraged the group’s active client base, which now exceeds 24 million, with 13 million of the clients actively engaging with their app.
CEO Gerrie Fourie said in a presentation that the earnings for the financial year, were “extraordinary” and the best set of results he had presented for the bank, despite the challenging economic climate.
He said in an interview that the bank was currently performing as well as it did at year-end, and he did not foresee, at this stage, any major challenges that might disrupt them achieving another year of double-digit earnings growth.
“We have always believed that banking should be simple, affordable, accessible, and personal. Through our high-volume, low-margin business model, we are enabling everyone to access solutions that allow them to take control of their finances, protect their families, manage businesses, and unlock opportunities,” he said.
Looking to the future, he said their strategy would remain in place, at least for the next two to three years, and included delivery on the eco system, establishing a single service platform, becoming a full data-led company, developing more innovative products, growing into further opportunities provided in the insurance, business banking, VAS and Capitec Connect markets, and continuing to build AvaFin, the international online lending business.
“Capitec was primarily recognised for disrupting traditional banking with its simple, affordable Global One account and accessible credit. Building on this foundation… we’ve embarked on a focused diversification strategy to create a comprehensive financial ecosystem,” Fourie said.
Leveraging the bank’s strengths to provide value in areas such as credit, insurance, and accessible digital platforms and branches had resulted in increasingly balanced contributions to earnings.
Personal banking now constitutes 45% of total earnings, insurance accounts for 25%, strategic initiatives (VAS and Capitec Connect) contribute 23%, business banking makes up 5%, and AvaFin (consolidated from May 1, 2024) adds 2%.
Capitec’s focus on VAS and the Capitec Connect mobile virtual network operator (MVNO) delivered good results, and their combined net income surged by 61% to R4.4bn.
Over 11 million clients now use the Capitec app to purchase airtime, data, electricity, vouchers, and to pay bills. The bank captures over 40% of South Africa’s airtime and data transactions, and one in five digital vehicle licence renewals occur on its platform.
The shift to digital payments continues to accelerate. Card payments at tills and online had risen 18% to more than 2.4 billion transactions, while cash transaction volumes increased by only 3%.
E-commerce transactions, including those via Capitec Pay, surged by 47% to 488 million. More than 1 million clients were now actively using their Capitec cards through digital wallets such as Apple Pay, Google Pay and Samsung Pay. Capitec had also launched a new International Payments solution on the app, enabling payments to over 50 countries in 13 currencies.
Capitec Life manages over 3.3 million active funeral and life cover policies, insuring 15 million lives and contributing R1.9bn in net insurance income to the group.
“Since May 2024, we added in excess of 600 000 active funeral and life cover policies on our own licence. This rapid uptake highlights the appeal of our simplified, affordable insurance products and positions Capitec as potentially the fastest-growing Life Insurer in the country,” he said.
Active business bank clients increased to 218 207, up 15%, forex transactions grew by 92% and scored loan balances rose by 111% to R1.3bn. Fourie said credit for SME business clients was now being scored on their cashflow, and he anticipated good further growth in this business.
Capitec’s merchant commerce strategy involved selling new smart card machines outright rather than renting them, and providing competitive commission rates, which helped grow the number of active trading merchants by 124% to 63 000.
“The transactional data of these trading merchants enables us to provide an instant overdraft, or additional structured business finance within days in order to help the businesses grow, which in turn creates job opportunities that ultimately help the economy grow,” he said.
Fourie announced his retirement last month and he steps down as CEO on July 18, 2025. His successor will be Graham Lee, who has been with Capitec since 2003 and has held various positions within the group.
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