Fintech and insurance now drive more than half of Capitec earnings

Capitec’s expansion beyond traditional banking is becoming increasingly evident, with its fintech and insurance operations accounting for 56% of group headline earnings in the first half of its 2027 financial year.

Duncan McLeod reports for TechCentral that group headline earnings increased 19% to R9.5 billion in the six months to 31 August, while the interim dividend rose by the same percentage to 3 110 cents a share. Bizcommunity also reported the earnings and dividend figures.

Fintech contributed 29% of headline earnings, with insurance accounting for a further 27%. Personal banking contributed 37% and business banking 6%.

Fintech headline earnings increased to R2.7 billion from R2.1 billion. Revenue from value-added services and Capitec Connect increased 32% to R3.8 billion, while the number of value-added-services clients rose 14% to 13.5 million, ITWeb reported.

Capitec Connect, which operates as a mobile virtual network operator using Cell C’s network, increased net income 72% to R284 million. Its active customer base rose to 1.8 million from 1.1 million.

Insurance headline earnings increased 22% to R2.5 billion, supported by credit-life and funeral cover, while business banking headline earnings rose 52% to R609 million. The results also showed pressure from higher credit costs. Capitec’s group credit loss ratio increased to 8.4% from 7.9%, while the personal-banking ratio rose to 9.2% from 8.1%.

The group attributed much of the increase to a larger forward-looking provision and pointed to the US-Iran conflict and the 25-basis-point increase in the repo rate in May. Net interest income increased 7% to R12.7 billion, while net non-interest income rose 21% to R16.1 billion.

The cost-to-income ratio improved from 40% to 36%, while return on equity stood at 31%. Capitec also kept its fees unchanged for a second consecutive year.

The results follow the group’s name change from Capitec Bank Holdings to Capitec Limited. Shareholders approved the change at the July annual general meeting, with the new name taking effect on 26 August.

SOURCES: TechCentral, Bizcommunity, ITWeb, Capmad, Moneyweb.