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.
- BUSINESS REPORT