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Capitec Bank Holdings Limited – Retail Banking Sector

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Capitec Bank Holdings Limited (JSE: CPI) is a bank holding company based in South Africa.

The company operates in the retail banking sector of the South African economy.

Its services address three consumer needs: saving, which allows customers to obtain and store funds; credit, which enables customers to access and borrow funds; and transacting, which facilitates payments and funds transfer.

About Capitec

Capitec Bank Holdings Limited was established in 1999 in Stellenbosch, South Africa.

In South Africa, the company offers a variety of banking products and services through its subsidiaries. It operates in two divisions: retail banking and business banking, and provides the following services:

  • Transactional banking services,
  • term loans,
  • lending facilities,
  • mortgage loans,
  • overdrafts,
  • instalment sales and rentals,
  • credit cards,
  • access facilities,
  • rental finance; collection and payment services,
  • merchant services;
  • funeral and life insurance products.

It also offers treasury products such as foreign exchange spot trades, forward contracts, vanilla foreign exchange options, money market call or term deposits, and online banking and mobile banking services and debit cards. The company has nearly 857 branches and 2,660 ATMs as of February 2021.

Capitec Bank Holdings has a listing on Johannesburg Stock Exchange as (JSE: CPI).

Capitec Investments

Capitec business services include card machines, workplace banking, salary transfers, and financial skills. It also provides money management solutions and various digital solutions.

The company owns a stake in its main subsidiary, Capitec Bank Limited (Capitec Bank). Capitec Bank is a South African retail bank that focuses on banking services and offers individuals deposit, transaction, and unsecured lending products.

The Global One card from the company is connected to the respective customer’s transaction/savings account and provides them with different ways to access their money and transact around the world.

The Global One card is accepted in card machines, online shopping, and phone/mail orders.

1. Imimobile

Capitec partnered with imimobile in 2018 to provide a centralized customer messaging hub in order to provide a more personalized digital banking experience to its more than 10 million clients. Imimobile sends marketing messages via SMS, email, app push notifications, telemarketing, and direct mail.

2. EasyEquities

Recently the company has also partnered with EasyEquities. EasyEquities is an innovative investment platform that allows you to own parts of a company (shares) from as little as R5. They make it easy and more affordable to buy shares in local and international stock markets.

3. SA Home Loans

Capitec Bank announced a full home loan offering through its collaboration with SA Home Loans, which enables applicants to be tracked in real-time online, with contact explaining the specifics of each move and whether anything from the client is needed.

According to Francois Viviers, executive of marketing and communications at Capitec, the bank’s new digital solution was created in response to strong demand for an easy and affordable, digitally-led home loan alternative.

He said, “We’ve continually received requests from both clients and the public asking us to challenge the norms of home loans as we have done with banking.”

4. Live Better Academy

In 2020, the bank launched an online financial education program that teaches customers about investing, spending, and debt management.

The Live Better Academy provides practical advice and tactics to assist people in making wise financial choices and achieving their objectives.

5. Imvelo Ventures

Imvelo Ventures, founded by Capitec Bank and investment company Empowerment Capital Investment Partners, identifies and finances promising South African small and medium enterprises across the financial technology spectrum.

Recently, Imvelo Ventures funded delivery service Quench.

Quench delivers grocery, food, medicine, and alcohol to customers in major South African cities on the same day.


Image Source: Postmodern Studio –

Capitec IPO

In 2002, Capitec listed its IPO on JSE. Capitec Bank Limited is owned by Capitec Bank Holdings and accounts for 95% of the group’s assets. Capitec was founded by CEO Riaan Stassen and is owned by 24.08 percent of the board and senior management, 34.83 percent of the PSG Group, 15.83 percent of Black Economic Empowerment (BEE) groups, and 26.26 percent of various other shareholders.

According to Corion’s data, though Naspers is widely regarded as the greatest success story on the JSE in recent years, raising its share price from around R950 per share in 2005 to over R3400 in August. Capitec has provided investors with the greatest increase in value.

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Capitec business strategy

Capitec Bank Limited transformed the banking industry by offering a streamlined and cost-effective banking solution to the masses, i.e., South Africa’s “unbanked” population.

The business followed a disruptive innovation strategy by focusing on the lower-income earning segment of the market, i.e., people who work but do not have a bank account. Capitec’s strategic strategy and business model were built around innovation and technology, allowing it to capitalize on a previously untapped opportunity that no other competitor was targeting.

This strategy has resulted in the bank’s impressive growth over the last decade. Capitec’s return on equity (ROE) increased from 12% to 26%, and loans to customers increased from R116 million to R16 billion.

Capitec’s revolutionary technology-driven business model is aimed at the population’s low to middle-income earning profiles.

Capitec has good front-end information technology, including branches that are paperless and cashless. It has also strategically positioned itself in retail locations, resulting in funds swap agreements from a number of firms.

This can be seen as a competitive advantage for Capitec as it allows customers the flexibility to send money to other areas of the country.

Capitec stock analysis

Currently, Capitech is trading at 163,764 ZAR. It had recovered from its recent dip of 129,796 in December 2020.

The technical analysis suggests that CPI has a strong bullish trend.

In February 2021, it reported a 0% decline in half-year profit, at the bottom end of its forecast range, and increased debt from the previous quarter.

Bottom line

The banking sector has huge growth potential in South Africa, and Capitec is at the front row. Capitec provides an attractive investment opportunity, which also drives inclusive growth in the South African economy.  Though Capitec provides good overall investment opportunities, investors need to study the overall market before investing in Capitec.

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