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Capitec Bank, a leading retail bank founded by South African billionaire banker Michiel le Roux, posted a strong after-tax profit of $326 million in the first half of its 2025 fiscal year, which ends on August 31.
This was due to strong growth in all of its business segments. Although credit impairments were up, the performance was supported by higher interest income, higher fee income, and strict cost control. This shows that the leading retail bank can do well even when the global economy is tough.
Strong income growth across board
According to the retail bank’s latest annual report, profit after tax rose by 19.62 percent—from R4.69 billion ($272.5 million) in H1 2025 to R5.6 billion ($326 million) in H1 2026. The jump highlights how Capitec has continued to grow its business while keeping costs in check.
Much of the bank’s half-year earnings boost came from increases in both interest and non-interest income. Net interest income rose 15 percent to R10.11 billion ($588.44 million), supported by a 7 percent increase in lending-related interest. Investment income also advanced, with interest on financial assets at fair value through profit or loss climbing 65 percent to R534 million ($31.09 million).
On the non-interest side, income grew 14 percent to R11.05 billion ($643.16 million). Transaction and commission income rose 15 percent to R13.77 billion ($802.26 million), while foreign currency operations and other income also made positive contributions.
Credit impairments weigh, but margins hold
Credit impairments increased 7 percent year-on-year to R3.95 billion ($229.64 million). Even so, net interest income after impairments jumped 22 percent to R6.16 billion ($358.59 million), highlighting the bank’s ability to maintain profitability despite pressure from higher bad loans.
The lender ended the half-year with R48.7 billion ($2.84 billion) in cash and equivalents, up 65 percent from the previous year. Net cash inflows stood at R4.45 billion ($238 million), reversing a R5.39 billion ($288 million) outflow a year earlier.
A strong balance sheet and higher dividends
Michiel le Roux, Jannie Mouton, and Riaan Stassen started Capitec in 2001. Since then, it has become a major player in South Africa's banking industry, offering a wide range of products, from savings and transactional services to loans and credit cards.
Thanks to its impressive financial performance, Capitec's total assets increased by 12.41 percent to R242.44 billion ($14.11 billion) as of Aug. 31, 2025, up from R215.68 billion ($12.55 billion) in the previous half-year. The bank's total equity rose from R40.17 billion ($2.34 billion) to R46.24 billion ($2.69 billion), a 15.11 percent increase that made its financial position even stronger.
In light of its performance, Capitec’s board has approved an interim dividend of R26.2 ($1.53) per share, representing a 26-percent increase from the prior year. This translates to a dividend payout of R3.04 billion ($176.9 million) for the half-year ending Aug. 31, 2025.
