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Capitec banking clients swell to 3.9 million

FY results. The bank targets higher-income clients in higher-end malls – Gerrie Fourie, CEO – Capitec.

SIKI MGABADELI:  Capitec Bank says they grew their account holders by 18% to 8.6 million during the year to end-February. Headline earnings grew by 18% to R3.8 billion and the group declared a final dividend of R8, taking the total for the year to R12.50 – and 18% increase from the previous year’s R10.55.

Gerrie Fourie is CEO of Capitec and joins us now. Gerrie, thanks so much for your time today. Given the low-growth environment that we had in the past year, are you happy overall with your performance?

GERRIE FOURIE:  Good evening, Siki. Ja, I think if I look at our results, 18% growth overall, we are really happy. If I look at a year back, we said that the economy would benefit us in growing our client numbers, and especially our banking client numbers, and we can see if we look at the 1.3 million clients that joined us, it’s a record for ourselves. So we are very pleased with those numbers.

Most important are our banking clients. Our banking clients grew from 3.3 million to 3.9 million, so another 600 000 new banking clients have joined us. From that perspective very strong growth, and we can see that in our transaction income which grew by 30%.

And then on the credit side, we said it was going to be tough and a difficult year, and it was. We had to make credit adjustments on a regular basis. But I think overall we are fairly happy with our credit results.

SIKI MGABADELI:  That strategy to grow your primary banking clients – has that been part of rolling out in high-end malls?

GERRIE FOURIE:  Ja. We said that we want to target the more middle- to higher-income client base, and that’s why, if you look at those 76 branches that we opened, the majority of those are in the higher-end malls. It’s also in line with what we’ve done on the app, and it’s also in line with what we’ve done on the credit card, with the launch of the credit card. So that’s part of strategies that we are putting together to make Capitec more attractive for the middle-income client base.

SIKI MGABADELI:  How do you balance increasing your branch network on the one hand and also driving people to using the non-branch services, like your cellphone banking, your banking app and so on?

GERRIE FOURIE:  Well, just to put it in perspective, our self-help functionality has grown tremendously. In December we handled 80 million transactions on self-help, and 30 million in-branch. So you can see the self-help is quite a big contribution to our handling of volumes.

What we’ve seen in the branches is changing the functionality in the branches, where you are taking out the transactional functionality from the branch. Now the branch personnel can focus on selling the Global One product in the branch and making certain our clients really understand what Global One is all about.

SIKI MGABADELI:  And your outlook, then, Gerrie?

GERRIE FOURIE:  The outlook for our branches – we are looking at about 45 to 50 branches for next year. The main reason for that is we’ve got about 350 branches that still have the old look and feel, and we want to upgrade those to the new look. So the majority of our property department’s capacity will be used to upgrade our existing branches because the gap between our existing branches and new branches is just too big. So from a brand perspective we would like to look at that.

And then there is actually a big focus on quality clients, and then, having 8.5 million clients, to optimise those 8.5 million – that is the challenge that lies ahead.

SIKI MGABADELI: We’ll leave it there. Gerrie Fourie is CEO of Capitec.

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