It seems nothing can faze Capitec.
While it was just announced as the best bank in the world – here – it has other news: since it started back in February 2002, lender’s stock has gained in all but one of the years.
Jumping more than 50 000%, that is “the most among banks across emerging markets during that period,” reports Fin24.
Even this year, a pitiful year in South Africa’s economy, its shares have climbed 24%.
And, well, that’s not all:
Capitec, which specialises in providing loans that aren’t backed by assets to low-income earners, has seen its annual net profit jump almost 130 times since 2003 to R3.79bn as of the end of February.
It has expanded faster than the nation’s four biggest banks, adding 1.3 million customers in the last fiscal year alone to 8.6 million.
Harry Botha, a banking analyst at Avior Capital Markets in Cape Town told Fin24 that:
Capitec’s large customer base offers an attractive opportunity to cross-sell other financial products in the future.
And, while other banks are losing customers, Capitec is expected to attract more:
That expectation has helped boost Capitec’s stock this year, even as negative sentiment toward South African assets spurred the worst year-to-date performance for the banking index since 2013.
The shares have also been supported by its investor base. PSG Financial Services [JSE:PSG], a company founded by local businessman Jannie Mouton, who also started Capitec, and a group of so-called non-public shareholders own 46% of the lender’s stock, according to the bank’s latest annual report published in April.
PSG is the single biggest shareholder in the lender with a 31% stake, according to the report.
Just in case you were thinking of getting in while the going is good, you might be a little too late – this “meteoric rise” of Capitec’s stock has, of course, made them pretty expensive:
Capitec’s shares trade at about 20 times future earnings, compared with 10.4 for the banking index and 8.8 for the MSCI EM Banks Index. But the equity has been at a premium to its peers since at least 2014, and its estimated earnings-per-share has risen regardless.
The stock, which on Wednesday advanced 1.9% to close at R863, more than double the gain in the banking index, was trading 0.63% lower at R857.54 by 15:19 on the JSE on Thursday.
And that’s what you get for being South Africa’s cheapest bank – a whole lot of good news.
Let’s just hold thumbs they can continue doing their thing.
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