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During the Covid-19 crisis, Capitec Bank’s operating profit decreased 86% to R538 million, from R3.83 billion for the six months ended August.
Although there was a sharp drop in earnings for the period, there was a strong recovery in the second quarter, where the bank increased overall earnings above R1 billion, after incurring an overall loss of R404 million in the first quarter.
The recovery can also be seen in client revenues that returned to March levels at the end of August and in active retail banking clients that grew by 784,000 to 14.6 million for the six-month period.
Despite the recovery, the Covid-19 crisis put Capitec’s clients under considerable pressure; It offered them R7.5 billion relief in the form of payment interruptions and variable payment rescheduling.
The lock also added R4.2 billion to the total gross impairment charge of R6.3 billion for the reporting period.
Digital age
Capitec CEO Gerrie Fourie said one of the notable things about the Covid-19 crisis was how it accelerated the country’s digital transformation. He said this can be clearly seen in how the bank’s customers increasingly use its mobile app to transact.
“Our active app customers have grown 38% to over four million and our new app is the most downloaded app on all of the major South African app stores,” he clarified.
This move towards digital banking has seen its app, internet and USSD transactions collectively grow 52% to R556 million.
Capitec’s share price rose as much as 1.25% in morning trading before falling to its opening price of R984.31.
