Capitec earnings slashed by pandemic, digitalisation drive on track
Earlier this year Capitec Bank had warned its shareholders to expect an earnings loss of at least 70% due to the fallout of the lockdown.
According to the bank's unaudited interim results for the six months ended 31 August 2020, the real decline stood at 78%.
On The Money Show, Bruce Whitfield interviews Capitec CEO Gerrie Fourie.
If you look at our client base of 14.5 million clients, they actually represent the full South African spectrum... but for sure, the lower incomes have taken more stress and the high income people I think are fairly alright, given Covid.Gerrie Fourie, CEO - Capitec Bank
Whitfield asks Fourie if there's also concern about the threat posed by new banking players entering the market?
Fourie focuses on Capitec's strategy to enhance its digital offering.
We watch them [new competitors] very closely, but if you look at ourselves plus all other banks, we're spending quite a lot of money on the digital side. We've now already got 7.2 million clients that are performing digital transactions or are using our app... so we've already got a very strong base.Gerrie Fourie, CEO - Capitec Bank
At the end of the day it's about who understands the client the best and who delivers on those client needs, that's the long term plan.Gerrie Fourie, CEO - Capitec Bank
In the face of this confidence around Capitec's competitors, what does keep the bank's CEO awake at night?
Well, if you look at the South African economy - that really keeps anyone awake because I think if you look at the prospects for the next three to five years it's not very positive, and for us it's very important that government gives us clarity and trust to invest, the private sector.Gerrie Fourie, CEO - Capitec Bank
I think we're past the days of just talking and planning and we really need to execute. And we need to execute with urgency to make sure that the economy starts growing again and we create stability in South Africa.Gerrie Fourie, CEO - Capitec Bank
What we need to have is that all the different partners - Cosatu, government etcetera- believe in a strategy and go out and execute that strategy.Gerrie Fourie, CEO - Capitec Bank
If there's one thing he's learnt at Capitec says Fourie, it's that your strategy has to be crystal clear and understood by your people so that it can be executed.
If you execute and you see it's wrong, then be very quick to react and then change that strategy or make the corrections. We've seen it with Covid - where you are today you need to be agile, you need to be flexible and you need to be quick to market.Gerrie Fourie, CEO - Capitec Bank
Listen to the discussion below:
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