Gerrie Fourie named as new Capitec head
Capitec Bank Holdings, South Africa's second-largest provider of unsecured loans, said Gerrie Fourie will become chief executive officer when Riaan Stassen retires at the end of the year.
The Stellenbosch, South Africa-based bank said Fourie (49) will take over on January 1 from Stassen, who turned 60 this year. Fourie is responsible for the lender's sales and operations, Capitec said on Wednesday.
Under Stassen's leadership, Capitec became South Africa’s sixth-largest bank by market value with more than 8 000 employees, about 600 branches and almost R43-billion in assets. While rival African Bank Investments warned of a drop in profit as loans sour amid a slowing South African economy, Capitec has continued to show growth.
Stassen was "the heart of the management team that established Capitec Bank in 2000", the lender said.
The executive said in an interview on Wednesday that he plans to stay on the company’s board.
Capitec fell 0.8% to R201.27 by the close in Johannesburg, paring this year’s gain to 10%. The six-member FTSE/JSE Africa Banks Index gained 1.4%, bringing the year's advance to 5.1%.
"Obviously he was iconic in that position and was the pioneering spirit behind the bank, so shareholders will be sad to see him go," said Craig Pheiffer, general manager of investment at Absa Asset Management Private Clients in Johannesburg. "But his successor has been there since the start too."
Net income rose to R980.8-million for the six months through August from R710.8-million a year earlier, Capitec said. Diluted earnings per share rose 21% to R8.38 and the dividend climbed 20% to R2.03. Fee income from loans fell 26% to R465-million while Capitec boosted its provisions for bad debts 70% to R3.2-billion.
While the loan book will continue to decline, Capitec is "confident it will continue to grow its customer base" and increase transaction income, Stassen said in the interview. "Since June there has been a decline in arrears. I can't see why we can't render good returns going forward."
Unlike African Bank, Capitec takes in customer deposits and is able to benefit from fees and commissions linked to clients’ transactions. Capitec now has R5-million active clients, it said. Although numbers have grown, labour unrest including wage strikes have been disruptive, according to Stassen, who said the number of clients who lost their jobs in the fiscal first half rose 9.5% from a year earlier.
"Despite South Africa's medium-term challenges, we remain excited about the future and the opportunities available to us," the company said. "Unsecured credit is here to stay."
Capitec, which usually sells debt in November, is not planning further sales this year because of a rights issue last year that boosted capital, and also slower lending, Stassen said. – Bloomberg