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Capitec says worst over in bad loans, shares up 9%
![Source: Reuters.](https://biz-file.com/c/2309/713809-700x364.jpg?7)
Capitec Bank is among the fastest-growing South African lenders as it targets low-income earners who were largely untapped by the well-established and conservative banking behemoths of the country.
But being exposed to the lower-income bracket, the bank also bore the brunt of higher impairments as its customers came under strain after 10 successive interest-rate hikes.
The lender, South Africa's biggest retail bank by customer numbers, has seen the chance of retail credit turning into a non-performing loan shrinking back to levels seen four years ago, chief executive officer Gerrie Fourie said on an investors' call.
"We believe we have turned a corner," he said, adding retail loans that could turn sour stood at 7.6%, last seen in August 2019, and would come down further in the next few months.
The lender, which serves 21 million customers or a third of the country's population, said its credit impairment charge rose almost by two-thirds to R4.76bn ($248.20m) for the interim period.
But there were signs the situation was improving, with the overall impairment charge of the second quarter lower by 8% from the first quarter, Fourie said.
Capitec Bank reported a 9% rise in its half-year profit with headline earnings per share - the country's standard profit measure - of R40.72 ($2.13), and distributed more than a third of this dividend.
Source: Reuters
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