Capitec Bank (CPI) H2 2025 earnings summary

Executive summary

• Headline earnings rose 30% to R13.7 billion, with ROE up to 29% and active clients reaching 24 million, driven by growth in personal, business, insurance, and AvaFin segments.

• Net interest income after credit impairments surged 54% to R11.9 billion, reflecting strong performance despite challenging macroeconomic conditions.

• Client base reached 24 million, with 13 million app users and 8.8 million fully banked clients, up 13.3%.

• Strategic focus on innovation, digital transformation, and diversification into business banking, insurance, and value-added services.

• AvaFin acquisition expanded international reach, contributing R196 million to headline earnings and R1.2 billion to net lending/investment income.

Financial highlights

• Headline earnings: R13.7 billion (+30% YoY); Net interest income after impairments: R11.9 billion (+54% YoY); Net non-interest income: R23.9 billion (+22% YoY).

• Return on equity (ROE) at 29%, with a dividend payout ratio increased to 55% and dividend per share up 34% to 6,510c.

• Credit loss ratio at 7.5% overall, with personal banking at 8.1% and business banking at 1.7%.

• Transactional income up 17% to R14.1 billion; value-added services and Capitec Connect up 61% to R4.4 billion.

• Operating expenses rose 30% to R18.1 billion, but adjusted for incentives and AvaFin, OPEX grew 14% to R14.9 billion.

Outlook and guidance

• Plans to launch secured home loans and repay-as-you-earn loans for SMEs and multiple-income earners in 2025-2026.

• Focus on scaling business banking, expanding VAS, and integrating AvaFin for international growth.

• Continued investment in technology, cloud, and data insights to drive efficiency and client value.

• Cautious credit management with weekly reviews to maintain credit loss ratios within the 8-8.5% range.

• Anticipates further economic headwinds in South Africa, with risk scenarios incorporated into credit models.