CAPE TOWN, April 22 – South African lender Capitec Bank posted a strong set of annual results, with profit rising 23% as higher lending activity boosted interest income.
The lender, which serves more than 26 million active clients in South Africa, reported headline earnings of 16.8 billion rand for the year ended February 28, up from 13.7 billion rand a year earlier.
Growth was largely driven by a surge in lending, with total loan disbursements increasing 34% to 98.3 billion rand. Net interest income also climbed 19% to 24.1 billion rand, supported by a 14% rise in interest income on loans.
However, the expansion in lending came with rising credit risks. The bank’s credit impairment charges increased 21%, while its credit loss ratio edged up to 8.1% from 7.5%, indicating a higher level of non-performing loans.
Despite this, profitability remained strong, with return on equity improving to 31% from 29% the previous year, underscoring Capitec’s ability to generate solid returns even in a more challenging credit environment.
Shareholders also benefited from the performance, with the bank declaring a final dividend of 53.60 rand per share, up from 44.25 rand previously.
The results highlight Capitec’s continued growth momentum, driven by rising consumer demand for credit, even as it navigates increasing risks tied to loan quality.
