DURBAN - Capitec Bank’s share price slipped by more than 4 percent on the JSE after media reports that the SA Reserve Bank (Sarb) has written to the National Credit Regulator (NCR) requesting a probe into loan origination fees charged by the bank.
However, Capitec Bank has slammed the reports and said it was not true that the bank was being investigated. Charl Nel, the head of communications at Capitec Bank, said the bank had taken note of the blatant, misleading and untruthful commentary by the media. “We have no knowledge of the investigation that the media refers to and we are in close and regular contact with the Sarb and the NCR,” Nel said.
Capitec’s share price declined to R850.90 a share in the morning, down from Monday’s closing price of R888 a share. The share closed 3.94 percent lower at R853 on the JSE yesterday.
George Herman, a director and chief investment officer at Citadel, said if the claims were correct, it was great to see that regulators were not asleep at the wheel and were pro-actively engaging with issues affecting retail customer funds.
“One has to ask though: Where were they with VBS Bank?” Herman asked. Capitec was accused by Viceroy for reckless lending in its report published in January, leading to a 25 percent decline in its share price in one day. Viceroy said Capitec boosted its income by charging excessive fees on its multi-loan product. However, the bank has always maintained its stance that it does not roll over loans and is not involved in reckless lending. The National Treasury strongly defended the bank and said Capitec was solvent, well capitalised and has adequate liquidity. Kokkie Kooyman, a portfolio manager at Denker Capital, said there was not enough information to suggest that Capitec was being investigated.
“I can’t verify the accuracy, but it would make sense that if the Sarb thought that fees charged by a bank were out of line that it would refer it to the National Credit Regulator,” Kooyman said. He added that he was not sure as to how the process worked or if the Sarb would automatically let the bank know or if that would come from the NCR when it decided to indeed investigate.
“So I am not surprised that the
bank is not aware at this stage,”
Kooyman said.
He said obviously Capitec
and any other bank would not
suck a bank charge out of its
thumb and would have a basis
for the rand amount of percentage
of a fee charged.
“Bear in
mind that Capitec has been taking
market share and gaining
clients daily from the large four
banks because its fees are lower
and more competitive, hence, I
would be surprised if Capitec
was found to be overcharging,”
Kooyman said.
Nesan Nair, a senior portfolio
manager at Sasfin Securities,
said: “I think it is good for the
NCR to look into this – one way
or the other we will receive confirmation
as to whether there
were transgressions.”
Nair added that this was one
of the issues that Viceroy had
raised and depending on what
the outcome of the investigation
was, “we will at least know
whether there was any truth
to the Viceroy allegations”, he
said.
Capitec received a major
boost yesterday when S&P
Global ratings said that it had
raised the national scale longterm
credit ratings of Capitec
Bank, the wholly owned subsidiary
of Capitec, to zaAA from
zaAA-.
“This change was affected
by S&P after the revision of its
criteria on national scale ratings
and subsequent recalibration
of the mapping table for South
Africa,” S&P said.