Capitec business banking earnings jump 52% as client base more than doubles
Capitec says its low-cost, data-driven model lifted business banking headline earnings 52% to R609m, with entrepreneur sign-ups pushing business clients to 545,000 and POS merchants to 141,000.
By Larry Claasen
CAPITEC’s move into business banking is paying off, with the bank more than doubling its business banking client base helping the division’s headline earnings rise by more than 52% to R609 million for the six months to the end of August 2026.
The Stellenbosch-based retail bank made its name by offering low-cost transactional banking services to consumers and is now replicating this model in its business banking offering.
Business clients more than double to 545,000
Capitec executive for business banking, Karl Kumbier, said the number of business clients more than doubled from 244,000 to 545,000 over the period. The biggest driver of this growth was the signing up of about 237,000 entrepreneurs as business banking clients.
Low-cost model extended to SMEs
Kumbier said the goal was to attract customers with its low-cost, easy-to-use offering — it prices personal and business banking exactly the same.
“We believe SMEs have paid too much for bank charges in the past. Businesses moving to us now save up to 50% on charges, and larger ones moving to us save as much as 90%,” he said.
Data fuels lending and product sales
Capitec then uses data from these customers’ accounts to extend loans and sell other products, driving revenue growth that is reinvested to improve client experience and reduce costs.
Kumbier said Capitec’s business offering is now comparable to that of any other bank.
“We have a fully fledged business now. We offer commercial property loans, car finance, asset finance and overdrafts.”
Overdraft approved in two minutes
Its products include an overdraft facility that can be approved in two minutes using a “selfie” for verification. It also offers a term loan for high-risk customers, where it collects repayment daily.
“Every single day we collect a little bit out of the account. So if you have a good day we collect a little bit more, and if you have a bad day we collect a little bit less.”
Ninety One: lending against cash flows, not collateral
The move to sign up entrepreneurs is part of its strategy of targeting businesses that were too small to fit into a typical corporate banking framework, according to a 2024 research note by Ninety One.
The asset manager said Capitec would eventually develop alternative approaches to business financing.
“Capitec is in the process of acquiring business clients while gaining a better understanding of their transactional activities and cash flows. This will allow the bank to unlock an alternative approach to business financing, effectively lending funds against the cash flows of a business rather than its assets,” Ninety One said in the note.
Capitec could make loan-granting decisions based on monitoring transactions on the point-of-sale (POS) machines it provides to customers, rather than on business collateral.
POS merchant numbers surge
This strategy is paying off for Capitec: while other banks charge R450 a month to rent a POS device, Capitec charges a once-off R699. The number of merchants using its POS devices has risen from 32,000 two years ago to 85,000 last year and 141,000 this year.
Total turnover through those devices rose from R27,1 billion two years ago to R42,4 billion last year and R61,8 billion this year.
Lending book grows 37%
The data it has collected has helped it grow its lending book by 37% to R35,5 billion in the period.
What excited Kumbier was growth in the “scored” part of its lending book, which rose 175% to R4,2 billion, as these are loans to very small businesses.
Higher-risk loans lift impairments
Although the value of business loans it has issued is sharply up and impairments doubled in rand terms, Kumbier pointed out that this was largely because it is issuing higher-risk loans, with the risk priced into the product.
