Capitec Forecasts 70% Profit Fall In Blow To Shares

CAPITEC Bank forecast a fall of at least 70% in first-half earnings on Friday due to a spike in bad loans from the coronavirus crisis, the first major South African lender to detail its full effect.

Concerns over a jump in bad loans after a nationwide lockdown to contain the coronavirus have hit South African banks and Capitec’s shares, which were already down 42% so far this year, were 2.5% lower at 1359 GMT.

Capitec, which had forecast a drop of at least 20% in first-half profit in May, said it expects headline earnings per share, the main profit measure for South African firms, to fall by more than 1,782 cents from the 2,545 cents it reported for the six months to the end of August 2019.

The bank said its credit impairment charge was 145% higher than forecast, mainly due to 5.75 billion rand ($338 million) and 236 million