Capitec

Capitec is a company we admire for its simplicity, innovation, and ability to deliver long-term superior growth by leveraging its large and growing customer base to pivot into new profit pools. The retail bank continues to grow customers and take share from the incumbents with products like credit cards, which are helping to drive these gains. Capitec continues to launch new Value-Added Services (VAS) into its retail base to drive non-interest revenue. Examples include Capitec Connect, their mobile offering, currently used by 1.6m of their customers but with ambitions to get to 10m customers. Capitec has moved into business banking and insurance markets, significant profit pools where they are well positioned to take meaningful share over the long term on the back of its lower cost offering and scale. While the share trades on high near-term multiples, the strong earnings growth we expect to materialise from these initiatives means that the multiples quickly moderate and are attractive for a business of this quality. 

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