At 31, Rihanna is the richest singer in the world, according to a Forbes ranking. Over the past fifteen years, the mogul has sold $280 million worth of albums and singles, amassed over 75 million Instagram followers, and has become an entrepreneur, beauty muse, TV star, and fashion icon.
South Africa banks: ITV – Capitec Bank
Since Viceroy, a research house linked to short sellers, produced a scathing report in January on Capitec Bank, the bank’s share price – and its reputation – have been under pressure.
Capitec rebutted Viceroy’s claims, which refer to it as a loan shark with understated defaults.
Viceroy called on the Reserve Bank and finance ministry to place Capitec under curatorship. It followed up in May with an open letter that makes similar accusations. Since then, the Reserve Bank has asked the National Credit Regulator to investigate Capitec’s lending practices, a move that was initially denied by the central bank, leading to further uncertainty.
Capitec has, to date, been able to maintain its course.
It continues to pose a threat to Absa, FNB, Standard Bank and Nedbank, specifically by increasing the contribution of parts of its business unrelated to unsecured lending. In the year to February, its client numbers totalled almost 10 million. Its non-lending income grew 31% to make up 41% of total net income as the bank invested in self- service banking, where there has been a sharp increase in transaction volumes.
Most downloaded banking app
From the start, Capitec’s client base was generally lower-income clients, and it did not offer high-tech options like banking apps or even credit cards.
Today, 74% of all transactions are performed by clients on self-service banking channels, compared to 62% in 2017. More than three million clients have activated its banking app, which Capitec says is the most downloaded banking app in South Africa.
In its February 2018 year-end report, Capitec reiterated its view on unsecured lending, saying it played an important role in South Africa, where more than 75% of people do not have access to traditional secured lending. The bank also said that arrears as a percentage of gross loans and advances had decreased from 6.3% to 5.7%.
Capitec has also put out a warning to the insurance industry, saying it believes “that offering insurance solutions that are personalised and competitively priced will deliver value to our clients and disrupt the insurance market in a similar way to what we do in banking.”
It has entered the insurance industry with the launch of the Capitec Funeral Plan, underwritten by insurer Sanlam.
This article first appeared in the September 2018 print edition of The Africa Report magazine