Battle of the banks: Capitec vs Standard Bank vs FNB vs Absa vs Nedbank

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cr@zydude

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I've been a long time fan of Capitec, both as a client and a shareholder, but I have to say that the current P/E scares me. I'm thankful to others for continuing to bid the share price up, but I really think that Capitec has to show better earnings soon to justify that incredible market cap.
 
Johnatan56

Johnatan56

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cr@zydude said:
I've been a long time fan of Capitec, both as a client and a shareholder, but I have to say that the current P/E scares me. I'm thankful to others for continuing to bid the share price up, but I really think that Capitec has to show better earnings soon to justify that incredible market cap.
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Not really that much of an issue tbh, they signed up a lot of customers last year, and Capitec delayed a lot of payments and stuff last year as it was more important not to let people default if they can than try to make a short-term profit.
I think their growth looks like it might hit a cap sooner rather than later though, question is more other banks messing up etc., and Capitec will keep gaining clients considering their account price.
Did want to jump to them, but they don't have the option to do outgoing international payments AFAIK, you need to use a third party.
 
Cius

Cius

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Jan 20, 2009
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cr@zydude said:
I've been a long time fan of Capitec, both as a client and a shareholder, but I have to say that the current P/E scares me. I'm thankful to others for continuing to bid the share price up, but I really think that Capitec has to show better earnings soon to justify that incredible market cap.
Click to expand...
Its been very steady at between 20 and 30 for years now. Generally they produce the growth to achieve it. Thing is the number of potential clients is drying up now that they have passed 15M and future growth will be more about new product offerings. They are still mostly earning as a retail bank. They need to ramp up their business banking, and break into corporate and investment banking in a big way to continue growth. That or branch out into new markets perhaps in Africa. It will be an interesting time either way to see how they evolve.

A lot of their growth was also due to their extremely low cost structure that they managed with a very new and lean IT system. Now that they are getting older as a company their own systems will include more and more legacy systems like the other big incumbents have with critical 30 year old systems written in Fortran that are expensive to maintain but hard to replace. Once their IT system age starts catching up with the rest I suspect the pressure to increase fees will go up as well. That may chase away a lot of their client base as a big chunk of Captic clients are very price conscience and moved to them because of the cheap offering. Either way Kudos to them for the spectacular rise and for shaking up the SA banking sector a bunch. I will watch their progress with interest.
 
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