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Capitec’s digital strategy prompts lofty full-year returns

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The COVID-19 pandemic accelerated the adoption of Capitec’s digital banking offerings, propelling the bank’s digital transactions to over a billion rand during the financial year ended in February.

Gerrie Fourie, CEO of Capitec Bank, says the bank’s tech focus came to the fore during the pandemic and it acted swiftly to counter the impact on its clients and business operations.

Capitec says it is now the largest digital bank in the country, and in the period under review, it experienced a 28% increase in digital adoption, with digital clients now totalling over 8.6 million.

Adoption of digital channels by its clients contributed to a 35% increase in the number of digital transactions, amounting to R1.1 billion, which Capitec says illustrates its ability to scale.

Capitec Bank declared an increase in headline earnings of 18% to R3.9 billion during the last six months of its annual period up to end February 2021. However, it says, as a result of the first six months of COVID impact on operations, its annualised basis headline earnings were down by 27% to R4.6 billion.

A final dividend of 1 600c per ordinary share was declared (February 2020: 755c per share).

“We embraced innovation and digitalisation and so did our clients, and the permanent benefits and cost savings are expected to flow in the coming years. Clients are now more than ever before motivated to use digital channels, such as our new banking app, as they are set to benefit from the lower transaction fees and zero-rated data charges,” says Fourie.

“It is a privilege to be able to help nearly 16 million South Africans simplify their banking so that they can live better. We believe the strong client growth we’ve seen over the last year is testament to the fact that our offering of simplified, affordable banking delivered through personalised service is more relevant than ever.”

During the past year, Capitec says it continued to grow its active client base by an average of 160 000 clients per month – a 14% increase to 15.8 million customers.

Furthermore, Capitec says, its banking app was bolstered through the ability to “scan to pay” on any major QR code, its virtual card for safer online shopping, as well as the EasyEquities widget allowing clients to buy and sell shares seamlessly on the app.

The bank says in response to strong demand from South Africans, the bank launched the Capitec Home Loan solution in partnership with SA Home Loans. The solution offers clients a simple digital application process and reduced fees.

Fourie says: “We have transformed banking over these two decades and have had a meaningful impact on the financial lives of our clients. We will remain focused on making banking simpler, more affordable, more accessible and more personalised.”

Capitec celebrated its 20th anniversary last month and Fourie says the bank is today a transformed digital banking player that is agile and nimble.

Commenting on the focus for the year ahead, Fourie says the bank will upgrade branches to assist clients with shifting towards a digital banking platform, underpinned by self-service.

“We just launched the ability to open an account and join Capitec on our app by simply taking a selfie and scanning your ID, and the option to order your card for home delivery will launch in the near future.”

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