EasyAssetManagement Insights on Capitec

Tune in to Thulisa Shandu, Junior Portfolio Manager, and Shaun Krom, our CIO at EasyAssetManagement
as they talk about Capitec's standout performance in 2024 against South Africa's banking giants. See how Capitec excels in earnings, strategy, and customer charges compare to other leading banks below.

Capitec VS Other Banks
Capitec released strong results for 2024 financial year. Headline earnings per share (HEPS) increased by 16% to 9 171 cents per share, from the restated 7 938 cents per share in the prior year and operating profit before tax increased by 16% to R13.448 billion.

Headline earnings per share (HEPS) measures a company's regular income from activities like operations, trading, and investments. It excludes one-time expenses like write-offs to clearly show the business's core profitability. HEPS is essential for analysts to accurately assess and recommend companies.


Moreover, the Banking sector in South Africa is quite a competitive one where market capitalization often reflects confidence and perceived value. With regards to share price, Standard Bank and Nedbank are steadier given their well-established existence with significant corporate banking activities.

In contrast Capitec’s share price has been more dynamic showing its newcomer status and aggressive strategy in the retail banking sector. About 78% of revenue for Capitec come from its retail bank whilst Standard Bank and Nedbank are 32% and 58% respectively. When comparing bank charges, Capitec maintains the lowest bank charges among the five major banks whilst Nedbank provides the highest overall. The company has benefitted from its revenue model when looking at a few ratios in contrast with other major banks.

Net interest margin (NIM) reveals the amount of money that a bank is earning in interest on loans compared to the amount it is paying in interest on deposits, it’s indicator of a bank’s profitability and growth. Capitec in the 2023 financial year boasted the highest NIM amongst the banks of 8.47% with Standard Bank coming in second with a NIM of 5.13%.

With Capitec leading domestic peers in growth and returns, it’s likely to continue with Capitec’s more recent ventures such as gaining a controlling stake in Cyprus-based online consumer lending group Avafin Holding for as much as €26.3m (R530m) as part of its internationalisation strategy to grow its footprint in the e-commerce lending space. Furthermore, the entity could also gain market share in its more business lines.

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