JOHANNESBURG - Research group Viceroy yesterday dismissed the R2.5billion provided by Capitec Bank as estimated cured loans for the year to August last year.
Viceroy said the amount presented to Benguela Global Fund Managers should instead have been R5.2bn for the period. In an open letter sent to the Capitec board of directors, Viceroy questioned the criteria used by Capitec to report cured loans.
It described Capitec’s time to cure estimates of two months as “conservative” and the highest observed on clients that were one month in arrears. Viceroy said two months would be conservative, given that arrears were written off after the third month and the highest cure rates were observed on clients that were one month in arrears.
Viceroy said it believed Capitec’s definition of “conservative” in this case was misleading, as a shorter time to cure would imply a much higher value of loans that were in arrears over the course of the year.
“It is frankly unfathomable that a purportedly highly regulated financial institution must resort to providing estimates of its own financial data to begin with. It is more unbelievable that, when the integrity of Capitec’s accounts is questioned, the disclosures become less transparent,” Viceroy said.
Capitec had repeatedly dismissed Viceroy’s findings in the past and went as far as inviting the US fund manager last week to an open discussion with it.
On Monday, Capitec chief executive Gerrie Fourie said it was business as usual at the bank as it continued to sign up new clients despite the uncertainty.
Fourie said Capitec signed between 6000 and 8000 customers a day in February. He said he expected to have about 9.8million clients by the end of its financial year, which is at the end of the month.
In August, Capitec had 9.2million customers.
Capitec said it had taken note of the open letter posted by Viceroy on social media earlier yesterday.
“We will investigate the issues raised in the letter in detail and will respond appropriately once this process has been concluded,” Capitec said.
“Our invitation to Viceroy to contact us and engage directly with management still stands, but they have not done so to date. As mentioned before, we believe Viceroy will continue with their campaign in the media in order to break down trust in Capitec for their own financial gain.”
Capitec shares eased 0.36percent on the JSE yesterday to close at R821.10.