Capitec jumps almost 8% as it flags earnings growth

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Capitec, SA’s largest retail bank by customer numbers, has flagged a modest uptick in interim earnings as financial pressures on consumers led to higher credit impairments.

The Stellenbosch-headquartered lender, which has more than 20 million active clients, advised shareholders on Friday that group headline earnings per share are expected to rise between 8% and 10% for the six months to end-August 2023, up from a restated R37.36 for the comparative period. The restatement relates to the implementation of IFRS 17 Insurance contracts standard at the beginning of March.

Capitec said it tightened its credit extension criteria during the six months to end-August to appropriately address the risk in its loan book created by adverse economic conditions characterised by persistent inflationary pressures and higher borrowing costs. "This led to consumers being under financial pressure, which impacted the retail bank loans and advances and resulted in a higher credit impairment charge and credit loss ratio."

 

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