Capitec CEO Graham Lee admits that the more than R1 billion increase in the banking group’s credit impairments in the first half of its 2027 financial year could be “cause for concern” when viewed “out of context”.
Credit impairments across its personal and business banking units increased by 21%, while its credit loss ratio (annualised) was adjusted upwards to 8.4%, from 7.9% a year ago.
Lee maintains that “these are sensible numbers that indicate that we’re executing our business plan”.
He says there are four main underlying drivers of the numbers.
Higher economic risk
Firstly, Capitec deliberately raised its forward-looking macroeconomic provisions firmly.
Lee says this was a proactive move, and “not because of the experience that we’re having now but looking ahead to 12 and 18 months [from now], where we think the macro is going to be tougher”.
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In its personal banking book, this forward-looking impact (FLI) was 70 percentage points, which was the main driver of that book’s credit loss ratio (CLR) increasing to 9.2% (from 8.1% in August 2025).
In business banking, this FLI overlay added 50 percentage points to see that book’s CLR move to 3.4% from 2.1% a year prior.
