Capitec Bank Has Reported A 27% Decline In Its Earnings. South African bank Capitec Bank declared an annual dividend of 1,600 cents ($1.10) per share on Tuesday, when it also reported a 27% decline in full-year profit.
According to Nasdaq, Capitec had already flagged in March that its profits for the year could drop by up to 29% as a result of the coronavirus crisis, which has hit banks by prompting a sharp increase in bad debt charges, interest rate cuts and less fee income from transactional activity. Capitec is often thought to be more exposed to economic downturns than its peers because of a historic focus on lower-income consumers and unsecured lending, which relies solely on their promise to repay.
Capitec Bank is a South African retail bank. As of August 2017 the bank was the second largest retail bank in South Africa, based on number of customers, with 120,000 customers opening new accounts per month. The bank maintains 500 retail branches nationwide, 3418 own or partnership ATMs and has over 6.2 million customers, according to the 2015 Chief Financial Officer’s Report. Of these customers, 309 000 are online banking customers and 3.5 million are mobile banking customers.
According to Independent Online, its headline earnings per share – the main profit measure in South Africa – stood at 3,966 cents for the year to Feb. 28, compared with 5,428 cents a year earlier and in the middle of its forecast range. That included a 7.36 billion rand ($504.41 million) charge for bad debts, and a 1 million rand loss at its business bank, which it acquired in 2019 but had until December held as a subsidiary within its group rather than a unit within the bank.
When it comes to customer satisfaction as per the results by South African Customer Satisfaction Index (SAcsi) in 2015, Capitec Bank comes first with 82.2 points. Capitec Bank has emerged as the best bank in the world by International banking advisory group Lafferty in its inaugural Bank Quality Rankings. As of February 2017 the majority, more than 5.5 million, of Capitec clients paid less than R50 per month in bank costs.