Capitec Bank has continued to impress with good results today for the six months to August, with headline earnings a share up 20%, and a similar hike in the interim dividend. Meanwhile, CEO Riaan Stassen has announced his intention to stand down at the end of the year. What do our experts think?
Independent Analyst Ian Cruickshanks:
Capitec continued its steady growth, but it was not as explosive as it has been in the past. Maybe it is proving difficult to continue expanding the customer base, and loan growth, in an environment where consumers remain under considerable pressure on the income and employment sides. Shareholders will welcome the 20 percent increase in dividends and I am really impressed by the cost to income ratio of 33% – way beyond the 50% where the major banks operate.
Ron Klipin from Cratos Wealth:
This was a very sound set of operational results. The diversification of the deposit base resulted in better-quality funding and liquidity. The strong growth in transactional fee income is impressive, as well as the tightening of credit criteria. Many of the above factors are absent in the business models of its peers. The next six months will remain challenging, but management has had a good track record in the past in dealing with a difficult operating environment.
Simon Brown from justonelap.com
These were solid results, showing they tightened earlier in the cycle and hence are not getting hit as hard. They also generating significant revenue from the traditional banking model and they have a cost to income at an astounding 33%. Riaan Stassen retiring as CEO won’t hurt them, but it remains a complete mystery why at a certain age companies insist on showing people the door.
Capitec is no longer a young pretender, but is an established predator and must be rattling the established big banks. It may be seeing a slowdown in growth but is still performing impressively. We will wait to see the transition to the new CEO and whether this causes any fallback – not that it needs to.
Tweets of the day:
superman (@MrSandeepP): Beginning of the day: I have so much work to do. *logs onto Twitter* 8 hours later: *Goes home*
Puns (@omgthatspunny): Alcohol and calculus don’t mix so don’t drink and derive.
Funny Tweets ( Funny Tweets (@iQuoteComedy): Life is short. Smile while you still have teeth.
Frankie Boyle (@frankieboyle): The best thing about twitter is that I no longer need to carry around a box of tiny opinionated idiots
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