There’s no stopping Capitec, as it declares surprise special dividend

Capitec Bank on Tuesday declared a special dividend of 1 500 cents per share along with a final dividend of 2 440c per share for the year ended February 28, 2022.

Together with its interim dividend of 1 200c per share, the total amount of gross dividends to be received by shareholders is R51.40.

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The special dividend declaration comes after the group implemented an employee broad-based black economic empowerment share scheme in February where R1 billion in shares were issued to its staff.

Its capital adequacy ratio for the year was 36% on par with last year’s 37% and ahead of the levels from 2018 and 2019 (in Covid-19 impacted 2020, it was 31%).

The declaration of a special dividend means the board believes the bank will be more than adequately capitalised in the coming year and that it currently has no better use for the capital.

Read: SA banks ‘remarkably healthy’ – GCR Ratings

In 2019, Capitec bought specialist business bank Mercantile for R3.56 billion. It continues to integrate the bank and build out an enhanced proposition. The unit reported headline earnings of R174.5 million in the year, with a 10% increase in clients.

Overall, Capitec Bank reported headline earnings per share of 7 300c, an increase of 84% on the prior year. It has achieved an annual compound growth rate in headline earnings of 23% since 2012, a decade ago. Its return on equity is 26% and the bank saw a 14% increase in active clients to 18.1 million.

Total transaction volumes increased by 26% to 6.7 billion.

It says total gross loans and advances increased by 12% to R84.1 billion from R75 billion last year and R75.8 billion in 2021. The business bank’s gross loan book increased to R12.9 billion from R11 billion in 2021.

Credit impairments decreased by 55% as the it accounted for the full impact of the Covid-19 pandemic last year.

 

Update to follow …