JOHANNESBURG, March 27 (Reuters) - Capitec lagged estimates with an 18 percent rise in annual profit on Tuesday as South Africa’s fifth-largest lender pulls back from lucrative but risky unsecured loans in the face job losses and a weaker economy.
Launched in 2001 as a micro-lending business, Capitec is positioning itself as a fully-fledged bank with no-frills account, savings and insurance and credit card products to cut its reliance on unsecured loans, which rely solely on a customer’s promise to pay it back.
The company said diluted headline earnings per share (EPS) came in at 3,846 cents in the year ended February, slightly below a 3,883 cents forecast by Thomson Reuters’ SmartEstimates — which puts more weight on recent forecasts and those from historically accurate analysts.
Headline EPS, the widely watched profit measure in South Africa, strips out certain one-off items.
Capitec, which competes with Nedbank, Standard Bank , FirstRand and Absa Group, said net income from transaction fees jumped 31 percent to 5.1 billion rand ($437.27 million), while net income from lending was up 7 percent to 12.6 billion rand. ($1 = 11.6634 rand) (Reporting by Tiisetso Motsoeneng and Patricia Aruo, Editing by Sherry Jacob-Phillips and Louise Heavens)