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The peoples' bank on 20% earnings increase


Capitec (CPI)

Banking! Boredom, reincarnate comes to mind when I think of banking, but that is all about to change with innovations by the country's most popular bank, Capitec. Innovation and cutting costs for clients are some of the main popularity drivers from Capitec who takes the complexity out of banking and puts the value back into the customers pocket. With self-service centres driving profitability and adding 200 000 clients a month, the little engine that could finally did and became SA's biggest bank.

Fundamentals and Outlook

The bank recently released results with an impressive 20% increase in headline earnings for the six months ending August 2019. Operating profit also increased by 18% to R3.83 billion and earnings per share increased by 20%. For the shareholder that's excellent news as the share price has gained over 30% since the August, 27th low and best of all it’s time for the dividends again.

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Capitec Bank

The bank is set to pay an R7.55 interim dividend per share and is scheduled to go ex-dividend on the 30th of October 2019. The payment day will fall on the 4th of November 2019.

Some new developments at Capitec include GlobalOne, the latest contactless card offering from Capitec which along with a new banking app is set to offer more value for its customers. The bank is growing at an alarming rate as the need for no-frills banking increases. 

Chart life

Since our last review on Capitec, the price action moved lower from the expected 123000c per share support level to the 108000c per share level supported by a weakening Rand.

The price action rebounded after positive earnings and a strengthening local currency which saw the price action push higher.  Capitec's share price is now firmly on its way to the 141000c per share resistance level. We might see some selling in the short term as investors take profits, but ultimately a push beyond this level might see investors drive prices even higher.

Source - Bloomberg

The best news of all is this stock is a #Trive50 share, which means 'Thrivalists' stand to pay $0 in brokerage fees when purchasing Capitec Bank Holdings Limited (CPI) stock on EasyEquities.

Portfolio particulars:

  • Portfolio Neutral (Current).
  • Portfolio Buy opportunity: Neutral.
  • #WhatsTheBeef Long term Target price: Neutral

Know your company: Capitec (CPI)

  • Capitec was established on the 1st of March 2001 with its International partners including MasterCard and Visa.
  • Founding members include Riaan Stassen, Michiel Le Roux and Jannie Mouton who also founded the PSG Group.
  • Forbes Media released its first-ever ranking of the World's Best Banks in 2019 and Capitec was rated as the best bank in South Africa.
  • Capitec runs a paperless banking system which means clients will never have to complete the same forms repeatedly.

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Barry is a market analyst with GT247, with a wealth of experience in the investment markets. Now in his tenth year in the markets, Barry "The Beef" Dumas brings a combination of technical analysis and fundamental insights to the table

Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by Barry Dumas, Market Analyst at GT247 (Pty) Ltd t/a (“”) as general market commentary, and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. First World Trader (Pty) Ltd t/a EasyEquities (“EasyEquities”) and do not warrant the correctness, accuracy, timeliness, reliability or completeness of any information received from third party data providers. You must rely solely upon your own judgment in all aspects of your investment and/or trading decisions and all investments and/or trades are made at your own risk. EasyEquities and (including any of their employees) will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.