Capitec defends its fundamentals after share price falls off a cliff

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Capitec defends its fundamentals after share price falls off a cliff
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Analysts say the bank faces the same risks and exposure to the weak economy as its peers

Capitec Bank says it has a solid middle-class customer profile. Picture: WALDO SWIEGERS

Analysts say the bank faces the same risk and exposure to the weak SA economy as its peers and other SA consumer stocks that have plunged in the wake of the spread of the novel coronavirus and global economic strain. Capitec said in a statement that international traders motivated by the continued weakening of the rand had sold the bank’s shares on Wednesday, leading to a drop in price.

Nolwandle Mthombeni, an investment analyst at Mergence, said despite its dramatic drop, “there’s no news flow that would warrant specifically such a dramatic fall”. But Capitec explained in a statement to investors that only 9% of its customers have loans and a growing proportion of its clients are middle-class customers.

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