South Africa’s Capitec posts 21 rise in H1 earnings

September 29, 2014

JOHANNESBURG (Reuters) – Capitec Bank Holdings’ first-half earnings rose by an expected 21 percent after the South African mass-market lender attracted more customers and booked higher transaction income.

Diluted headline earnings totalled 1,015 cents in the six-months to end-August, from 838 cents a year earlier.

Capitec, which offers high-interest loans to low-income South Africans, said income from lending rose 13 percent to 5.2 billion rand ($462 million).

However, write offs increased to 2.1 billion rand, a 28 percent increase from a year earlier. The bank said it increased provisions by 199 million rand to cover potential weakness in its book.

Another unsecured lender, African Bank, was rescued earlier this year after mounting bad debt sunk it.

Capitec said net transaction fee income jumped 34 percent to 1.2 billion rand following its push to enlist higher-income customers. Active users increased by more than 400,000 to 5.8 million.

Capitec shares have gained 17 percent so far this year, outpacing an 11 percent increase by Johannesburg’s banking index. ($1 = 11.2524 South African rand)

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