South African lender Capitec Bank has announced its financial results for the fiscal year ending February 2024, highlighting significant growth and outlining ambitious strategic plans for the future.
A key highlight of the year was the expansion and diversification of Capitec's retail banking offerings. The introduction of new products drove significant growth, with the active client base reaching 22.0 million, up from 19.9 million in the previous year.
As of February 29, 2024, Capitec's active client base comprised 36% of South Africa's total population, further solidifying its position as a leading retail bank in the country. With a footprint of 866 branches and 8,382 ATMs and DNRs across South Africa, Capitec continues to expand its reach and accessibility to clients.
Notably, 11.2 million clients are now using the group's banking app, reflecting a substantial increase from 9.4 million in the prior year. Moreover, fully banked clients, contributing more to income, rose to 7.8 million from 6.9 million in 2023.
The adoption of value-added services (VAS) also saw a notable increase, with 9.8 million clients utilising these offerings, resulting in enhanced income from VAS.
Financially, Capitec reported strong performance metrics, with operating profit before tax increasing by 16% to R13.448 billion. Headline earnings per share rose by 16% to 9,171 cents per share, demonstrating the bank's continued growth trajectory.
Additionally, total dividend per ordinary share increased by 16% to 4,875 cents per share, underscoring Capitec's commitment to shareholder returns.
Capitec's board approved a final gross dividend of 3,345 cents per ordinary share, reflecting a significant increase from the previous year.
The total dividend for the 2024 financial year amounted to 4,875 cents per share, underscoring the company's dedication to delivering value to its investors while maintaining healthy capital ratios.
Looking ahead, Capitec said it aims to optimise its retail banking operations by focusing on digitalisation and customer-centric solutions.
With 846 branches and a robust digital infrastructure, the bank plans to encourage clients to utilise self-service channels for transactions while enhancing personalised interactions in branches to capitalise on selling opportunities.
Additionally, Capitec intends to expand and diversify its VAS offerings to meet evolving client needs, such as the recent launch of a vehicle license disk renewal service on its app.
Moreover, Capitec is poised for international expansion with the recent approval from the South African Reserve Bank to increase its shareholding in Avafin Holdings Limited, an international online consumer lending group. This strategic move aligns with Capitec's vision for geographical diversification and growth opportunities in key markets.
On March 11, 2024, the South African Reserve Bank (SARB) greenlit Capitec's plan to boost its stake in Avafin Holdings, from 40.66% to 97.69% for EUR26.3 million.
By April 15, 2024, all regulatory hurdles for the acquisition were cleared. Avafin operates in various countries, offering online consumer loan products.
Shares in the bank have increased 25% over the past year.
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