Capitec Bank Holdings expects to report higher earnings for the first half of the financial year due to lower credit loss ratios and as net transaction and commission income, including value-added services, contributing to strong growth in non-lending income.
The group’s headline earnings per share for the six months ending August are expected to be between R50.90 and R54.97 — an increase of 25%-35% from the R40.72 reported a year ago.
Earnings per share are also expected to increase by 25%-35%, the group said in a statement on Friday.
The first half of 2023 was characterised by high credit impairment charges due to the effects of high inflation, elevated interest rates, load-shedding and a tough economic climate.
Theses factors contributed to subdued single digit year-on-year growth in earnings and headline earnings for the six months ended August 2023.
There was an improvement in both the credit impairment charge and credit loss ratios (CLRs) and this contributed to the 22% year-on-year growth in earnings and headline earnings for the second half of the 2024 financial year.
Earnings and headline earnings during the second half of the 2025 financial year will therefore be compared against a higher base, Capitec said.
“The lower CLRs have persisted into the 2025 financial year and net transaction and commission income including value-added services has continued to contribute to strong growth in non-lending income,” it said.
Effective May 1, Capitec acquired an additional shareholding in international online consumer lending group Avafin Holding.
As a result, from this date Avafin was treated as a subsidiary and 97.075% of its profit for the period was included in the group's income statement.
Before May 1, 40.66% of Avafin’s profit for the period was included as Capitec's share of income from an associate.
Capitec expects to publish first-half results on October 1.
Capitec’s share price was up 1.8% at R2,742.51 in late morning trade on the JSE.
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