South Africa’s leading challenger bank, disrupting the incumbents
With an emphasis on efficiency, Capitec Bank has achieved the lowest cost base in the industry, which allows it to offer more competitive rates to customers. The lower loan rate not only helps attract higher quality customers, it also inherently reduces credit risk through lower instalments. It is common to see such win-win practices at Capitec, with the bank applying a cap on returns (measured by return on equity) of 25%.
As it has grown and gained market share, Capitec has reinvested the extra returns in new growth areas while passing on the cost savings to customers through lower fees and rates. This in turn attracts more customers, generating further growth and unlocking economies of scale which the company then reinvests. As a result, Capitec has created a virtuous cycle of growth, scale and reinvestment.
Capitec now has the largest number of retail customers in the country (approximately 23 million accounts) and has diversified into new revenue streams, entering the business banking market in 2024 with the Capitec Business brand. We are already seeing positive signs. Capitec’s approach to business banking is similar to the way it took on the retail banking market twenty years ago – it has slashed transaction fees, simplified price menus and improved service quality and transparency. We are excited about the potential value the bank can create in the coming decade.
FY2025 Profit Split
Reinvesting for growth
* Strategic initiatives are the non-banking services which include prepaid SIMs, vouchers, lottery, bill payments, etc.
Return on equity (ROE) is a measure of financial performance calculated by dividing net income by shareholders' equity.
Book value per share (BVPS) is a measure of a company's assets, allocated to each outstanding share of common stock.
Source: Company data, Bloomberg, as at 30 June 2025.
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