South Africa’s largest retail bank by customer base, Capitec, has issued a bullish trading update, forecasting a significant rise in earnings for the six-month period ending 31 August 2025. The bank expects headline earnings per share (HEPS) to increase by between 22% and 27%, reaching between 6,764 cents and 7,041 cents per share, respectively.
This anticipated growth reflects robust performance across all divisions, with each business unit contributing positively to the group’s financial results.
Capitec highlighted several factors behind the projected earnings surge:
- Increased loan disbursements, coupled with a stable annualised credit loss ratio, have bolstered net interest income after credit impairments.
- The bank’s net investment portfolio has grown, further strengthening its interest income.
- Net transaction income and commission have continued to rise, supported by expanding client activity.
- Capitec Connect, the bank’s mobile service offering, has seen a notable increase in both active users and transaction volumes, contributing to overall revenue growth.
Capitec also emphasized the impact of its simplified fee structures, including reduced transaction fees and streamlined merchant commission models, which have improved customer experience and driven higher usage.
The bank’s insurance operations have also played a pivotal role in boosting profitability. Since 1 November 2024, funeral insurance policies have no longer been subject to a profit-sharing agreement, allowing Capitec to retain a greater share of earnings. Strong sales volumes have further propelled growth in net funeral income.
Capitec’s life insurance arm, Capitec Life, now operates under its own license and manages over 3.3 million active funeral and life cover policies, collectively insuring 15 million lives.
The upcoming interim results will include a full six months of income from Avafin Holding Limited, compared to just four months in the same period last year. This acquisition has contributed to Capitec’s expanding footprint and diversified revenue streams.
The interim results will mark the first financial report under the leadership of Graham Lee, who succeeded long-serving CEO Gerrie Fourie in July 2025. Fourie, who led Capitec through a decade of transformative growth, helped evolve the bank from a microlender into a financial powerhouse valued at R430 billion.
Lee’s first reporting period is expected to affirm the bank’s continued momentum and strategic direction under new leadership.
Capitec’s strong interim performance follows a record-setting financial year ending 28 February 2025, during which the bank posted a 30% increase in headline earnings, reaching R13.7 billion, despite economic headwinds and pressure on consumers. The group is scheduled to release its full interim results on or around 1 October 2025.
