Capitec’s fintech business added R2.7 billion to group headline earnings in the six months to 31 August.
The figure rose from R2.1 billion a year earlier, the bank said in its unaudited interim results on Wednesday. The fintech business covers prepaid airtime, data, electricity and money transfers, as well as the Capitec Connect mobile service.
That is about three-quarters of the R3.5 billion earned by Personal Banking without fintech, TechCentral reported. A year earlier the share was less than two-thirds.
Group headline earnings rose 19% to R9.5 billion. Capitec raised its interim dividend by 19% to 3 110 cents a share.
Net non-interest income made up 70% of income from operations after credit impairments. That was up from 65%.
Combined net income from value-added services and Capitec Connect rose 32% to R3.8 billion. Value-added services alone brought in R3.5 billion, a rise of 30%.
The number of clients buying prepaid airtime, data, electricity and other services grew 14% to 13.5 million. These transactions rose 26% to 1.1 billion.
Net income from the send cash money transfer service rose 32% to R906 million. Capitec said clients were increasingly using the service instead of withdrawing cash. It has 6.8 million users.
Capitec Connect sells mobile services over Cell C’s network. Its net income rose 72% to R284 million. That is almost two-thirds of the R442 million it made in the whole previous financial year.
Clients active in the past three months rose to 1.8 million from 1.1 million a year ago. Data usage more than doubled to 34.3 petabytes. Voice minutes rose 84% to 573 million.
During the period, Capitec introduced free Capitec-to-Capitec calls. It also raised the maximum airtime advance from R10 to R100. Clients took up R96.8 million in advances, up from R36.1 million.
Digital payments also grew. The number of clients using Apple Pay, Google Pay, Samsung Pay and Garmin Pay rose 68% to 2.4 million. Their spending rose 87% to R52.1 billion.
Banking app users increased to 16.5 million from 13.9 million. Capitec Pay, the group’s enterprise payments platform, processed 182 million payments worth R45 billion. Its net income rose 51% to R365 million.
Capitec did not raise any fees for a second year in a row. Total net transaction and commission income still rose 20% to R12.2 billion. Transaction volumes grew 14%.
Credit costs rose. The group’s annualised credit loss ratio increased to 8.4% from 7.9%. In Personal Banking the ratio rose to 9.2% from 8.1%.
Capitec said the increase came largely from a bigger provision for expected future losses. It cited the US-Iran conflict, which it said added to higher inflation and a repo rate increase in May. The rate rose by 25 basis points to 7%.
Business Banking headline earnings rose 52% to R609 million. Its credit loss ratio climbed to 3.4% from 2.1%.
Operating expenses rose 5% to R10.5 billion. The cost-to-income ratio fell to 36% from 40%. Technology spending, not counting salaries, rose 8% to R1.7 billion, with cloud fees up 27%.
In July, Capitec agreed to sell Capitec Rental Finance to a subsidiary of Sasfin Holdings. It acquired the rental finance business with Mercantile Bank in 2019.
Source: this article is based on reporting by TechCentral. Image: TechCentral. Written with the help of AI and published by the Tzaneen Voice Technology desk. See our Editorial Standards.
Werner Jacobs covers technology for Tzaneen Voice. Werner reports on mobile networks, data prices, internet access, smartphones, apps, AI, cybersecurity and South African tech companies. Each story explains what a new product, price change or policy means for ordinary users in South Africa.