Breaking News

Zim basks in regional anti-sanctions solidarity

AHEAD of the SADC Anti-Sanctions Day, President Mnangagwa has paid tribute to resilient Zimbabweans and the region ...

Get breaking news alerts.
Don't miss a thing.
Subscribe

Capitec’s earnings plunge

01 Oct, 2020 - 00:10 0 Views
Capitec’s earnings plunge

The Herald

Capitec has reported a 78 percent fall in headline earnings after it lost out on transaction fees and loan sales during the lockdown as its customers borrowed and transacted less.

South Africa’s largest bank by customer numbers, Capitec is highly exposed to the low-income segment of the population that suffered the most from job losses during the ongoing lockdown.

Capitec said the lockdown negatively affected all areas of its business for the six months ended on 31 August, save for active client numbers which grew by 6 percent from 13,9 million at the end of February 2020 to 14,7 million at the end of August 2020.

Capitec’s operating profit before tax decreased by 86 percent to R538 million, from R3,83 billion August 2019. Its headline earnings tanked to R650 million, a decrease of 78 percent from R2,9 billion in the first six months of 2019. The bank chose to preserve cash and not declare an interim ordinary dividend.

Capitec’s cief executive Gerrie Fourie told investors during the bank’s results presentation yesterday that the lower-income segment which it predominantly serves, especially those earning less than R7 000 per month, were “much more severely affected” by the lockdown.

“For people earning R20 000+ a month, we are basically at the same levels of income as before. But we’ve seen a strong reduction in overtime and bonuses. Basically, everything has been stopped,” said Fourie.

He said some of the bank’s SME clients cut salaries by as much as 80 percent in the early months of the lockdown. Contract workers were also severely impacted as SMEs cut their costs. — News24.com.

 

Share This:

Sponsored Links