Capitec enters the home loans market.

CAPITEC announced at its annual general meeting on Friday it was introducing a home loan offering in its branches though a partnership with SA Home Loans and would launch a cellphone banking application in July.

Capitec CEO Gerrie Fourie said that this would allow the bank to attract middle-to upper-income customers.

He said the bank was not expecting to get a lot of income from home loans.

“I’m looking at the client acquisition and not earning much commission from the deal,” Mr Fourie said.

He said he was confident that the SA Home Loans product would not cannibalise Capitec’s unsecured lending business. Many Capitec clients use personal loans for home improvements as they cannot qualify for home loans.

Citing the National Credit Regulator’s Consumer Credit Market Research report, Mr Fourie told the meeting that only 1.8-million people had mortgages in South Africa out of 15-million people with credit records. He said that many people could not get home loans because the land that they were living on did not have a registered title deed.

This led people to source alternative forms of funding, like unsecured loans, to build or improve their homes.

The partnership with SA Home Loans gives the mortgage provider a platform to sell its home loans in Capitec branches, broadening the suite of products that is offered at a Capitec branch.

The offering will be tried out first in Capitec’s Gauteng branches from July 7 and later rolled out to the other provinces. Capitec has about 640 branches across South Africa.

“The offer will be piloted in 160 Capitec branches in Gauteng from July 7 and will be rolled out to the rest of the country in due course,” Mr Fourie said. “Capitec’s in-branch consultants will assist with the application and initial approval process, whereafter customers will be contacted by a dedicated SA Home Loans consultant within one business day to guide them through their evaluation and registration process.”

The home loans will be available to customers and noncustomers of Capitec and successful applicants will be approved for loans within five working days.

People can apply for home loans of between R100,000 and R5m.

At the annual meeting, Capitec’s remuneration policy continued to be a sensitive issue when it came to shareholders voting. Capitec’s remuneration policy was approved by 83% of the shareholders, with 17% voting against it.

At Standard Bank’s annual general meeting last week, 84% of shareholders approved the bank’s remuneration policy and 16% voted against it.

Mr Fourie and financial director Andre du Plessis, as executive directors, received bonuses of R40,000 and R35,000, respectively, for the period ended February because the bank did not achieve its targeted earnings per share growth.

With regard to the strike affecting the platinum mining industry, Mr Fourie said that Capitec’s exposure to the mining sector was 7.9% of its R33bn-plus loan book.

In the platinum sector the exposure was 1.8% of the book, and in the strike-affected Rustenberg platinum belt the exposure was less than 1%, Mr Fourie said. www.bdlive.co.za