[ad_1]
Financial services group Capitec reported on Wednesday (September 30) overall earnings of R650 million for the six-month period ending August 2020, a decrease of 78%.
Operating profit before tax decreased 86% to R538 million, from R3.83 billion in the prior year, and overall earnings per share decreased 78% to 562 cents, while profit before tax decreased 86% to R538 millions.
The results were driven by the impact of the closure on all areas of the business, Capitec said.
Net operating income (before net credit impairments) increased 10% compared to the six months ended August 2019 and amounted to 11 billion rand, while net transaction fee income increased 3% to 3,600 million rand during the six months ending in August. 2020.
Despite the impact of Covid-19, the number of active retail banking customers grew 6% to 14.6 million compared to 13.8 million at the end of February 2020, Capitec said.
The number of clients grew by 2.0 million compared to August 2019. Banking clients’ revenues were negatively affected by the lockdown and decreased by 25% in April 2020 compared to March 2020, it said. By August, revenue had returned to March 2020 levels.
The lower-than-expected increase is due to the impact of the blockade on both transaction volumes and rates, mitigated by the increase in the number of active clients, according to the group.
The bank’s board of directors considered the guidance of the Reserve Bank and decided not to declare an interim dividend.
At the end of August 2020, Capitec said there were 4 million app users (2019: 2.9 million) and 5.2 million USSD users (2019: 4.7 million). Digital transactions increased 52% during the reporting period.
Loan sales for the period decreased 35% compared to the prior year period and 56% compared to the six months ending February 2020. Credit card disbursements decreased 20% compared to the six months that ended in February, but were 6% higher than corresponding. Previous period.
Advances decreased by 64% compared to the six months ending in February 2020 and by 59% compared to the six months ending in August 2019, the bank said.
Looking ahead, Capitec said that economic conditions are expected to improve in the short term, but the full impact of the lockdown will only be seen in the medium term.
“Higher income individuals are expected to recover more quickly than lower income individuals and therefore we anticipate that the credit market will continue to be affected by the lockdown in the medium term.”
“Our focus is to lower the cost of credit for our clients, improve their experience and motivate them towards positive credit behavior. The payment performance of rescheduled Covid-19 loans is encouraging, but future payment success rates will reveal the medium and long-term impact of the lockdown on our clients, ”Capitec said.
The group said loan loss provisions will remain conservative.
As lockdown restrictions were relaxed, transaction volumes and revenue began to return to pre-lockdown levels. “We anticipate continued growth in quality banking clients, which will support transaction volumes and revenues.”
Capitec said that digital innovation in all areas of the business is a priority, as is building the corporate bank of the future.
“We will continue to meet the changing needs of our customers by launching new products. Some employees will continue to work from home and return to the workplace gradually and responsibly.
“Our fundamental principles will continue to be the foundation of our strategies. Close cooperation between the government and the private sector will be required to grow the South African economy. “
Read: Capitec downgrades earnings outlook
[ad_2]
