As at: 21 August 2026

Executive Summary

Key highlights

In this report, we review Capitec’s the FY26 results, released in April 2026:

Financial results at a glance:

• Net interest income (NII): NII increased by 19% from R20.2 billion in FY25 to R24.1 billion, supported by continued growth in the lending book and customer activity. After credit impairments, NII grew by 18% from R11.9 billion to R14.1 billion.

• Non-interest revenue (NIR): NIR rose by 19% from R23.9 billion to R28.3 billion, supported by strong growth across value-added services, which was up 34% from R4.3 billion to R5.7 billion; its insurance business expanding by 38% from R3.8 billion to R5.2 billion; and Capitec Connect surging by 129% from R193 million to R442 million.

• Client growth: The number of active clients increased by 7% from 24.1 million to 25.8 million, while banking app clients expanded by 18% from 12.8 million to 15.2 million. Transaction volumes rose by 11% from 11.1 billion to 12.3 billion, with digital transactions advancing by 26% from 2.5 billion to 3.2 billion.

• Credit performance: The annualised credit loss ratio moved 8.1% higher from 7.5%. CPI’s Personal Banking segment's credit loss ratio edged to 8.2% from 8.1%, while its Business Banking's increased to 2.4% from 1.7%.

• Operating expenses: Operating expenses increased by 12% from R18.1 billion to R20.2 billion, driven by continued investment in technology, data, and strategic projects.

• Headline earnings: Headline earnings rose by 23% from R13.7 billion to R16.8 billion, while headline EPS grew by 23% from 11 912 cents to 14 606 cents.

• Group ROE improved from 29% to 31%, supported by strong earnings growth and continued operating leverage.

• Dividends: Full-year dividends increased by 23% from 6 510 cents per share to 7 980 cents per share.

Analyst thesis

Our recommendation is based on:

• Capitec remains well positioned to benefit from improving conditions in the South African consumer market. Although short-term headwinds persist, the longer-term outlook includes lower interest rates, easing inflation, and an improving economic backdrop, which should support household affordability, credit demand, and transaction volumes.

• The group's large and growing customer base provides a significant scope to deepen customer relationships and cross-sell opportunity across Capitec's expanding product offering.

• Capitec's digital banking model and established customer franchise provide a strong platform for continued growth, supported by its simple, low-cost offering, increasing digital adoption and the ability to leverage its existing infrastructure across a broader range of financial products.

• Capitec's growth prospects and high-quality franchise have already been priced in, with the current share price leaving limited scope for further re-rating. We therefore believe the investment case is increasingly dependent on Capitec continuing to exceed already elevated market expectations rather than further expansion in the valuation multiple.