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Capitec continues to bring innovation to the bank market

Capitec continues to bring innovation to the bank market

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Capitec Bank continues to grow strongly through new digital products and new client gains of 165 000 a month, CEO Gerrie Fourie said yesterday.

The bank increased the number of its clients by 13 percent to 19 million in the six months to August 31, but the focus is not so much on growing the number of clients, but in growing the number of quality banking customers, Fourie said in an interview at the release of the bank’s interim results that saw headline earnings per share increase 17 percent to R4.7 billion.

On product innovation, this month saw the launch of Capitec Connect, a prepaid mobile offering in partnership with Cell C, that combines low, flat prepaid rates with bundles that do not expire, and which aims to offer bank clients a simpler solution at rates almost 50% below the average rate in the market.

Capitec said yesterday that the number of its digital banking clients who use its app, internet bank and USSD increased by 21 percent to 10.8 million, or 57 percent of total active clients.

The bank was recently ranked number one for “outstanding disruption” in financial services in this year’s Africa Bank 4.0 Awards.

Fourie said the growth was in spite of the fact that consumers took considerable financial strain through the period, due to higher inflation and interest rates and record-high fuel prices.

He said the migration of the data platform to the cloud had brought with it new solutions and the bank had renewed efforts to recruit for technology and data skills.

Some 1 642 new employees were appointed with 20% of new hires fulfilling critical technology and data roles.

“The business continues to grow and invest in its people and has already started recruiting top talent to fill nearly 900 new positions by the end of the financial year,” he said.

In terms of developing its own people, more than 30% of the vacant positions were filled by internal candidates, often through online learning partnerships,” Fourie said.

“It’s not about being tech first, but rather about meeting our clients where they are at, which is often in a hybrid world enabled through technology. We will continue to use our capabilities to turn our obsession with our clients into value-driven products and solutions,” he said.

Digital transaction volumes increased 27% to 791 million in the past six months. Transaction income grew 8% to R5.6bn, driven by the shift from cash to digital and point-of-sale transactions.

As a result, Capitec expanded its payments ecosystem. Samsung Pay and Google Pay were launched for contactless mobile payments to clients with zero fees for local card purchases. Capitec Pay, an online payment tool, was introduced.

Capitec also grew its Business bank by 60%, and it contributed R201 million to group earnings, versus R126m at the same time last year. Fourie said this business was being scaled up.

“Our vision is to provide personalised digital business banking in a scalable way to help entrepreneurs and SMEs grow. We are also on track to rebrand Mercantile to Capitec Business early in the next financial year,” he said.

Net credit life insurance income grew 60% due to growth in active policies and a reduction in claims paid, as the insurance markets normalised after the pandemic. Funeral plan income grew 72% based on growth in the active policy book. Fourie said these markets continued to grow robustly.

BUSINESS REPORT

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