Capitec's credit card offering has seen significant growth since its launch in May 2017.
The lender said that it is growing faster in the higher income segment as clients with inflows of over R15 000 per month into their Capitec account have increased by 17%.
Its credit card, banking app, digital payments, purpose lending solutions, and competitive interest on fixed-term savings accounts, all at the same low fees, have been vital in attracting these clients and competing with premium accounts from traditional banks, it said.
“Our offering is designed to meet the needs of 95% of South Africans without discriminating against age, race or salary. We’ve recently introduced license disk renewals on our App, gaining substantial market share weeks after launch," said Gerrie Fourie, CEO of Capitec.
Capitec, South Africa's leading digital bank, reported strong financial results, with earnings up 16% to R10.6 billion for the year ended 29 February 2024.
The group said it realised 25% growth in the second half of the year resulting from diversified businesses, and non-interest income now contributes 72% of total income.
Capitec’s active client base grew by 10% to 22 million, while App users increased by 19% to 11.2 million (2023: 9.4 million). Transaction volumes increased 21% to 9.9 billion (2023: 8.2 billion), and as a result,
Capitec’s transaction and commission income grew 29% year-on-year to R14.8 billion (2023: R11.5 billion).
Gerrie Fourie, CEO of Capitec, says this growth aligns with the bank’s strategy of shifting the market towards digital banking while maintaining a competitive advantage through branch service delivery.
The lender diversified its retail credit from traditional term credit to access facilities, credit cards and purpose lending for education, vehicle finance, home improvement and secured home loans.
Net loan sales and disbursements for 2024 were R48.5 billion, a decrease of 8% compared to 2023, with 62% now comprising Access Facilities and Credit Cards instead of Term Loans.
The bank’s credit card has seen a 35% growth in market share, and the number of high-income clients earning over R50,000 has increased by 56% over two years.
Credit income was driven by new credit solutions designed for specific purposes, such as its vehicle loan and education loan offerings, and affordability was improved by recognising multiple income sources.
"Our retail credit portfolio has transformed over the last two years, focusing on building a higher-quality loan book through 141 granting model changes in the past year and stricter credit granting criteria. Credit card disbursements, in particular, grew by an impressive 28% to R17.3 billion (2023: R13.5 billion), driven by our strategic focus on attracting lower-risk and higher-income clients," said Fourie.
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