September 26, 2018 / 6:09 AM / 3 months ago

UPDATE 1-S.Africa's Capitec Bank H1 profit surges on upbeat client growth

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JOHANNESBURG, Sept 26 (Reuters) - South African lender Capitec Bank reported a 20 percent rise in half-year profit on Wednesday, helped by strong client growth.

Headline earnings per share (EPS) came in at 2,128 cents in six months ended August, compared with 1,769 cents a year earlier.

Headline EPS, the widely watched profit measure in South Africa, strips out certain one-off items.

Capitec attracted 109,000 additional active clients every month in the past six months, it said, bringing the total number to 10.5 million customers.

Launched in 2001 as a micro-lending business, Capitec is positioning itself as a fully fledged bank with no-frills account, savings and insurance and credit card products to cut its reliance on unsecured loans, which rely solely on a customer’s promise to pay it back.

The lender is also among bidders for Mercantile Bank - a unit of the Portuguese state-owned banking group CGD - a transaction that will help the Stellenbosch-based company branch out into business banking.

Capitec, which competes with Nedbank, Standard Bank , FirstRand and Absa Group, said net income from transaction fees surged 32 percent to 3.1 billion rand ($216.18 million), while net income from lending slipped 4 percent to 6.1 billion rand.

The lender, which earlier this year was accused by short-seller Viceroy Research to have overstated its assets and income, will give shareholders an interim dividend of 630 cents per share, up 20 percent.

$1 = 14.3400 rand Reporting by Nqobile Dludla and Tiisetso Motsoeneng; Editing by Simon Cameron-Moore and Sherry Jacob-Phillips

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