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Banking group Capitec has further revised its earnings outlook for the first half of the year, and now projects an 80% drop due to the Covid-19 pandemic and its impact on the South African economy.
The group told shareholders that it expects overall earnings to be 78% to 82% lower than in the same period last year. This is a bigger hit than the previous guide, which saw earnings 70% lower.
It projects that overall earnings per share will be between 559.9 cents and 458.1 cents a share, compared to R2.545 cents per share reported for the period ending August 2019.
Similarly, earnings per share are expected to be between 560.8 cents and 458.8 cents per share, reflecting the same range (78% to 82% lower than previously).
In July, Capitec Bank reported that it incurred a loss of R404 million for the quarter ending May 2020, after the Covid-19 nationwide lockdown led to increased credit impairment charges and lower transaction volumes and loan sales.
At the time, the bank warned of a 70% decline in overall earnings during the first half of the year, scaring investors. However, he said that results for the second half of fiscal 2021 could return to normal levels.
Capitec said bank customer behavior shifted to fewer higher value transactions during the quarter and was hit the hardest during level 5 of the lockdown. After the level 5 crash, volumes improved but did not recover to pre-crash levels.
Capitec’s results are expected to be released on September 30, 2020.
Read: Capitec’s earnings warning scares investors
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