Capitec in move to calm bank’s clients

JOHANNESBURG – Capitec, South Africa’s biggest bank by customer numbers, moved to calm its clients yesterday, saying the business had strong fundamentals after the stock plummeted more than 30percent in early trade on the JSE before clawing back the losses to close 14.69percent weaker at R682.50.

The bank said the sharp decline was because international shareholders were impacted by the continued weakening of the rand which motivated the disposal of its shares.

“The algorithms applied by professional traders enforce disposal of a share when the price of that share declines below a certain limit,” said the company.

Capitec said there was speculation in the market it would be severely impacted by the coronavirus due to the market on which it focused and its unsecured credit business model. However, it said only 1.1 million of its 12.6 million active clients had credit.

The group said an increasing number of its client base came from the middle and higher income segment. “81percent of credit granted in August 2019 was to clients with a gross salary of more than R10 000per month, and 47percent to clients with a gross salary of more than R20000 per month,” it said.

Source: iol.co.za