Valerie Mmanthe Mampshika,[Bachelor of Arts in Psychology and English].
Capitec business loading
Capitec as one of corporate South Africa’s largest success stories over the past two decades, has paid generously to its early investors from 2001 since the bank was established.
At the present moment the bank has more than 18 million clients and rakes in R8 billion in annual profits.The bank based in Stellenbosch,Cape Town also has a market value of approximately R240 billion.
Capitec is the third uppermost bank of the JSE-listed banks in the Republic of South Africa,due to the outcome of frequent clients who are students,and the youngest client being at the age of 16 once they have they have received their Smartcard I.D.
The analyst in the Investment team at Allan Gray Mr Pieter Koornhof reported that since the bank was listed two decades ago Capitec has delivered a total shareholder return of 46 percent annually, dwarfing the 13 percent annually from the FTSE/JSE All Share Index (ALSI) and the 32 percent annually attained by Naspers, the second-best performing share over the period.
Those who have invested R1 000 in the ALSI on the day Capitec listed and reinvested all your dividends since, your investment would be worth R11 457 currently which is seen as a very respectable return that surpassed inflation by more than R8 000. A similar investment of R1 000 in Naspers would have grown to an breathtaking R287 378. However, R1 000 investment in Capitec would be worth an astonishing amount of R2.3m,Koornhof added.
Koornhof made the assumption that there are bountiful lessons to be drawn from Capitec’s runaway success,and bank founders deliberately targeted the banking industry due to its high hurdles to entry and large market size,and Capitec aimed to interrupt the industry.
Capitec excels in ensuring that they have a strong client-centric and innovative culture,also they aim to provide simple and accessible financial services for South Africans by including high-quality client service and fees which are simple, clear and affordable, often priced much cheaper than their rivals in the banking industry.
Capitec bank also been progressing in determining ways to better serve clients, including keeping branches open on weekends, running a 24-hour call centre, and paying high interest rates on savings accounts.
The success of Capitec has also made its founders Jeannie Mouton,Michiel Le Roux,and Riaan Stassen filthy rich in the process.Le Roux, who in this day and age owns about an 11 percent stake in the company is estimated to be worth $1.4 billion by Forbes.
Koornhof says one of the successes of was Capitec bank being refrained from going into secured lending and investment banking,although these are highly profitable divisions for other banks.
By not offering a comprehensive amount of complex products, Capitec avoided adding complexity (and the resultant costs) to its operations and IT systems.The business model built on voluminous small and relatively short-duration transactions had a second-order benefit by Capitec receiving feedback rapidly and learning what is beneficial for the company.
Capitec has also made incursions in business banking in the recent years. The lender gained Mercantile Bank in 2019 from the Portuguese government and plans on rebranding Mercantile Bank to Capitec Business in the first quarter of next year.
South African Reserve Bank’s Prudential Authority last month also allowed Capitec a licence to conduct life insurance business in South Africa,and Capitec is planning to start underwriting its own life and funeral insurance products soon.
