Capitec eating into SA banking giants

Stopped buying Capitec shares a while back already. I've grown wary of the *type* of customers Capitec is attracting. Low average revenue per customer, hyper sensitive to fees & most of them relying heavily on unsecured lending. Depending on economic conditions that strategy falls somewhere between bold and dangerous.

Should still provide value if you're looking at it from the perspective of a client rather than investor...but lets just say I'll watch from the sidelines for now.
 
HavocXphere said:
Stopped buying Capitec shares a while back already. I've grown wary of the *type* of customers Capitec is attracting. Low average revenue per customer, hyper sensitive to fees & most of them relying heavily on unsecured lending. Depending on economic conditions that strategy falls somewhere between bold and dangerous.

Should still provide value if you're looking at it from the perspective of a client rather than investor...but lets just say I'll watch from the sidelines for now.
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well they do try make a point of being cheaper, but yeah most difficult customers to handle, but someone has to
 
FNB is so much easier to spell :p

Is a small sample size like that an accurate reflection on real figures?
 
Hamster said:
FNB is so much easier to spell :p

Is a small sample size like that an accurate reflection on real figures?
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tbh I'd take this on faith without sample size...its obvious to anyone vaguely awake that Capitec is kicking ass at attracting new clients. The question is whether the current course is sustainable & can absorb the knocks that will def be coming

koeksGHT said:
most difficult customers to handle, but someone has to
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Sure...if you're trying to make money then its best to navigate around the difficult ones though.
 
HavocXphere said:
tbh I'd take this on faith without sample size...i
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Agree, two years back Capitec was just Capitec. Now half the people I know have an account with them, including almost my whole family. Still have my SB accounts for the trusts etc.. but all personal stuff went to Capitec.
 
More proof that Capitec is making inroads...

Johannesburg - Barclays Africa Group [JSE:BGA] plans to spend R1.2bn over the next three years on refurbishing its branch network in South Africa, its head of retail and business banking said on Monday.

The bank, previously called Absa, is trying to win back lower-income customers lost to Capitec Bank Holdings [JSE:CPI] and business clients taken by Standard Bank, Craig Bond said at a media briefing. The bank still uses the Absa brand in South Africa.

"We lost a lot of customers to Capitec. We were very conservative on personal loans," said Bond, who joined Barclays in January from Standard Bank, where he had been head of the China business.

Barclays has "lost hundreds of thousands of customers" to Capitec, he said.


http://www.fin24.com/Companies/Financial-Services/Absa-wants-customers-back-from-Capitec-20131202
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HavocXphere said:
Inroads are only worth something if you can make money off it...poaching the worst clients of the other banks isn't exactly a winning strategy imo.
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Can they be that bad if Barclays is willing to spend R1.2b to gain them back?
 
MKFrost said:
Can they be that bad if Barclays is willing to spend R1.2b to gain them back?
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I doubt that 1.2 is aimed at their worst clients...

Look I'm not saying Capitec is bad...I just feel that they made an excellent (risky) bet...but their edge is wearing off. The conditions no longer line up with said bet imo.
 
Unless ABSA is prepared to offer an account that costs R4.50 per month and offers 5% interest per annum on the account I very much doubt they'll get even 5% of those customers back.
 
HavocXphere said:
I doubt that 1.2 is aimed at their worst clients...

Look I'm not saying Capitec is bad...I just feel that they made an excellent (risky) bet...but their edge is wearing off. The conditions no longer line up with said bet imo.
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I get what you are saying and agree. I have a feeling Capitec will be venturing into the business side of things pretty soon i.e. business banking. There is increased pressure on their loan business and I think that is where most of their income is derived from and that is risky.
 
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