September 27, 2017 / 10:54 AM / in 24 days

UPDATE 1-South African bank Capitec looks to bolster market share

(Adds CEO comment)

JOHANNESBURG, Sept 27 (Reuters) - Capitec Bank could add another 2.5 million clients, its chief executive said on Wednesday, after South Africa’s fourth largest lender reported a 17 percent rise in half-year profit.

Capitec has grown rapidly over the past decade as millions of cost-conscious consumers switched from South Africa’s established banks to Capitec.

It has 9.2 million customers, up an average of 106,000 per month over the past year to now account for around 27 percent of the market, CEO Gerrie Fourie said.

“If we can take that up to 35 percent, which I think is possible, then you can bring in another 2.5 million clients,” he told Reuters.

South Africa has about 16 million youths who are yet to enter formal banking, which Fourie sees as a future source of new clients.

Capitec, which focuses on loans not backed by assets, last year started a credit card, which it says now has 200,000 users and a book of 1.3 billion rand ($96 million).

The bank reported headline earnings per share of 1,769 cents for the six months to August 31, from 1,517 cents a year ago. Headline earnings is the main profit-measure in South Africa and strips out certain one-off items.

Shares in Capitec were down 0.6 percent at 88.3 rand by 1047 GMT, lagging the JSE benchmark Top-40 index which was up 0.3 percent..

Capitec shares have rallied 30 percent this year, helping the bank overtake Nedbank as South Africa’s No.4 lender by market value.

$1 = 13.5243 rand Reporting by TJ Strydom; editing by Jason Neely

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