Is Capitec Bank in trouble?

blunomore

blunomore

Honorary Master
Joined
Jul 8, 2007
Messages
26,789
Reaction score
22
Location
Not yet CT ...
What is the consensus from financial fundis with reference to the recent Moody's rating .... and any advice for an existing Capitec client? Stay or go?
 
Well their Credit Rating has been dropped, and it's going to be a sore one come next quarter.
 
blunomore said:
What is the consensus from financial fundis with reference to the recent Moody's rating .... and any advice for an existing Capitec client? Stay or go?
Click to expand...
The downgrading was based on African Bank's collapse and not really on Capitec itself but this is going to affect their ability to borrow.
 
They are very different to ABL but they do cater to entry level bank account holders and have a biggish loan book. I can't see how the massive Rustenburg strikes and recent metal workers strike did not affect them in some way. Lots of people where unable to pay loans due to the strikes and it was predominantly people banking with companies like capitec.
 
The reality is the ratings downgrade won't affect anything except Capitec's ability to raise capital internationally.

Any deposits you hold with Capitec would be protected by the SARB if the bank should fail or run into difficulty.

The Reserve Bank, through the African Bank deal for the "bad bank", is showing their commitment to the industry and they will step in when required.

As an aside, Capitec has a very prudent provisioning (for bad debts) policy, where ABIL was far more aggressive in their provisioning and in offering advances/loans to borderline clients.
 
froot said:
Well their Credit Rating has been dropped, and it's going to be a sore one come next quarter.
Click to expand...

Meaning what exactly?

mmmig said:
The downgrading was based on African Bank's collapse and not really on Capitec itself but this is going to affect their ability to borrow.
Click to expand...

What, if any, are the implications for people like myself with a savings account at Capitec?

the eskimo said:
The reality is the ratings downgrade won't affect anything except Capitec's ability to raise capital internationally.

Any deposits you hold with Capitec would be protected by the SARB if the bank should fail or run into difficulty.

The Reserve Bank, through the African Bank deal for the "bad bank", is showing their commitment to the industry and they will step in when required.

As an aside, Capitec has a very prudent provisioning (for bad debts) policy, where ABIL was far more aggressive in their provisioning and in offering advances/loans to borderline clients.
Click to expand...

I am curious, was there a different system in place when Saambou Bank collapsed some 10 or 15 odd years ago? Why were their clients' deposits not protected by the SARB as you say will be the case with Capitec?
 
the eskimo said:
The reality is the ratings downgrade won't affect anything except Capitec's ability to raise capital internationally.

Any deposits you hold with Capitec would be protected by the SARB if the bank should fail or run into difficulty.

The Reserve Bank, through the African Bank deal for the "bad bank", is showing their commitment to the industry and they will step in when required.

As an aside, Capitec has a very prudent provisioning (for bad debts) policy, where ABIL was far more aggressive in their provisioning and in offering advances/loans to borderline clients.
Click to expand...

I need proof!!!!! even Capitec itself are unable to help me with that.
blunomore said:
Meaning what exactly?



What, if any, are the implications for people like myself with a savings account at Capitec?


I am curious, was there a different system in place when Saambou Bank collapsed some 10 or 15 odd years ago? Why were their clients' deposits not protected by the SARB as you say will be the case with Capitec?
Click to expand...

We cant afford another incident like Saambou. Where will out hard earned cash be safe and available when we need it? and of-course earn a few pennies in interest.
 
blunomore said:
What is the consensus from financial fundis with reference to the recent Moody's rating .... and any advice for an existing Capitec client? Stay or go?
Click to expand...

the reserve bank is taking it up with Moody's apparently. ABIL shouldn't have affected capitec's rating. although I am concerned about the amount capitec is lending customers, upto 100k I think. not sure of the requirements though.
 
Not a different system. The Reserve Bank would have, as a last resort, have funded any deposit holder if there was absolutely chance that the bank would meet that obligation. In the case of Saambou, FNB took over all assets and liabilities and all account holder obligations were met.
 
According to somebody from Captitec, their default rate is only 6%.

I for one dont believe that at all. The market they are in, and the interest rates they charge suggest otherwise.
 
the eskimo said:
Not a different system. The Reserve Bank would have, as a last resort, have funded any deposit holder if there was absolutely chance that the bank would meet that obligation. In the case of Saambou, FNB took over all assets and liabilities and all account holder obligations were met.
Click to expand...

Are you saying that no Saambou account holder lost a single cent?
 
As others have said, Capitec have been a lot more responsible with their lending. Nothing to worry about if you ask me.
 
blunomore said:
What is the consensus from financial fundis with reference to the recent Moody's rating .... and any advice for an existing Capitec client? Stay or go?
Click to expand...

Stay. I am not a Capitec client, but they are fine. Moodys downgrade is due to AB's downfall. Moody's view is that they have a similar business model, which is not true. Last time I checked, AB was no 1 in S.A in terms of personal loans. This is because they will give a personal loan to every man and his dog.

I havent checked, but as far as I Know the other ratings agengy's (Fitch and S & P) have not downgraded them. It will hurt them from an investment point of view, and they will take a slight knock in the local market. However, they are fine at the moment and are in no danger.
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X