Business Report Companies

Capitec Bank expects significant growth in half-year headline earnings for 2025

BANKING

Edward West|Published

Capitec Bank Holdings directors said all their businesses were likely to have performed well in the six months to end-August 2025.

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Capitec Bank Holdings’ directors said they expect headline earnings per share (HEPS) to increase between 22% and 27% in the six months to August 31, which represents another strong performance compared with its competitor banks.

The bank that pioneered paperless banking in South Africa from 2001 said in a trading statement on Wednesday that HEPS would likely be between 6 764 cents and 7 041 cents per share, compared to the 5 544 cents per share for the comparative six months ended August 31, 2024.

The growth in HEPS keeps Capitec among the fastest growing banks in South Africa in terms of earnings. Nedbank, for instance, reported 6% growth in HEPS for its six months to June 30, while Standard Bank reported 4% growth in HEPS in its year to December 31, 2024 and FirstRand’s normalised HEPS for its first half to December 31, increased by 10%. At the release of its last annual results in April, Capitec reported 30% growth in HEPS.

Capitec directors said group earnings per share were forecast to be between 6 792 cents and 7 070 cents a share, representing an increase of between 22% and 27% compared to the 5 567 cents per share for the comparative six months in 2024.

The directors said all of the bank’s businesses were contributing positively to the expected financial results. Loan disbursements increased, and the annualised credit loss ratio was stable. This, along with growth in the net investment portfolio, led to an increase in net interest income after credit impairments.

Growth in net transaction income and commission, including value-added services and income from Capitec Connect, continued as active client numbers increased and transaction volumes grew.

A simplification of transaction fees and the merchant commission structure, as well as a reduction in transaction fees, “has made a meaningful difference to our clients,” the directors said.

All funeral insurance policies sold from November 1, 2024, were no longer subject to a profit-sharing agreement, and the additional profit combined with strong sales had driven growth in net funeral income.

The interim results would include six months of income from the Avafin Holding, which is a provider of short term unsecured digital lending in other overseas markets, compared to only four months that were included in the interim period last year.

The results were expected to be published on or about October 1, 2025. Earlier this week, Capitec and FNB signed up with the Department of Home Affairs on a new partnership model to expand Smart ID and Passport services to hundreds of bank branches nationwide.

Capitec’s share price increased 1.2% to R3 664.71, bringing Capitec’s share price higher by over 26% over a 12-month period.

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