Innovation and On-the-Ground Efforts Boost Capitec’s Profitability
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JIMMY MOYAHA: Capitec Bank Holdings Limited, which recently surpassed FirstRand as South Africa’s most valuable bank by market capitalization, has provided their update for the six months ending August 31, 2025. Joining me on the line to discuss these numbers is Graham Lee, the new CEO of the bank.
Graham, it’s a pleasure to have you on the show. Welcome to the SAfm Market Update. First off, congratulations! It’s been a while since we’ve had a chance to talk since you took on this role. This seems like the perfect time to start our discussions.
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The first six months of the new financial year show strong figures: operating profits are up and headline earnings are increasing. Clearly, the bank is sustaining its growth trajectory, maintaining the momentum it has enjoyed since its inception.
What are your thoughts on the first six months and your new role?
GRAHAM LEE: Hi Jimmy, I really appreciate you having me on your show. It’s an absolute pleasure to join you today.
Reflecting on the results, I believe it’s fair to say that it’s an excellent narrative for a new CEO to present to the market. For me, it’s a fantastic start.
We’ve remained focused on our core principles and the strategy we’ve developed over the past few years, which is delivering strong results centered around our clients and their needs.
This approach has continued to yield positive outcomes, especially in terms of growth in our client base, particularly in faster-growing segments like the youth demographic, resulting in the favorable results you see today.
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JIMMY MOYAHA: Graham, how does a business like Capitec maintain its growth momentum? I recall that during the pandemic, Capitec crossed the threshold of serving over a third of South Africa’s population. It seemed likely that growth would eventually slow down, yet that hasn’t happened. What’s the key to the bank’s current success?
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GRAHAM LEE: There’s no hidden formula, Jimmy. Our approach is quite straightforward. We prioritize our clients and their needs, integrating this focus into our culture.
Every system we have directs our employees to put the client first, and we structure our offerings around those client needs.
We also drive innovation—purposeful innovation that serves clients’ interests. Our organization is designed to facilitate meaningful changes for our clientele.
We encourage our team to be bold, make decisions, and act in line with our guiding principles, always aiming for what’s best for our clients.
Moreover, we shape our business for scalability.
As a volume-driven organization, we seek to achieve scale, allowing us to create efficiencies that benefit our clients. By leveraging data, we can improve our processes and engagement strategies based on client insights.
This creates a positive feedback loop: the efficiencies and tailored offers attract more clients, propelling further growth.
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JIMMY MOYAHA: Graham, let’s delve into some of the numbers from the six-month period. I noticed a slight increase of over 5% in net impairments. Is this a cause for concern, or is it merely a reflection of the current operating environment?
GRAHAM LEE: No, there’s nothing to worry about. If we look at the credit loss ratio (CLR) for personal banking, it has actually improved. Our portfolio is healthy and has become less risky.
When analyzing the business bank, it’s important to consider its various components. The secured portion remains stable, while new, riskier business comes with a higher CLR, similar to personal banking.
We anticipate and price for this, so the slight uptick is part of executing our business plan.
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The overall CLR for the group is influenced by various factors, especially since we’re comparing a six-month period this year with a four-month period last year.
JIMMY MOYAHA: Graham, you mentioned that the business banking sector differs from personal banking. How is the business banking division progressing? There have been some acquisitions aimed at strengthening your market position, such as Mercantile Bank. How does the management view the current business banking offerings, and what are your expectations for the next six months?
GRAHAM LEE: We are extremely proud and excited about our business banking offering.
Mercantile Bank has been fully rebranded as Capitec Business for some time now, and we’ve implemented all the necessary platforms, technology, and personnel to support scaling this operation.
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We are now entering the market with renewed vigor, leveraging digital innovations like our scored overdraft available via the app, which can benefit a wide array of clients.
At the same time, we take a traditional approach by engaging directly with businesses to show them the respect they deserve—this means having a physical presence.
We’re deploying innovations to connect with businesses, attending events nationwide, ensuring we’re accessible not just in large cities but also in smaller towns across the country.
JIMMY MOYAHA: A bank that innovates for its clients and continues to offer the best service in the market. Starting the financial year strong and poised for a robust second half. We look forward to catching up at the end of that period.
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We’ll conclude our discussion on that note. Thank you, Graham, for your valuable insights and time.
Graham Lee, the Chief Executive Officer of Capitec Bank Holdings, joined us to discuss the first six months of their financial year and what lies ahead for the bank.
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