Capitec bank “a wolf in sheep’s clothing” says Viceroy

Written by on January 30, 2018

Viceroy Research, the company that highlighted the major financial shortcomings of the Steinhoff group, has now moved on to Capitec Bank.

In a report issued on Tuesday morning, Viceroy has called Capitec “a wolf in sheep’s clothing.”

“Based on our research and due diligence, we believe that Capitec is a loan shark with massively understated defaults masquerading as a community microfinance provider,” reads the report.

According to Viceroy, Capitec should be placed into curatorship immediately.

The company strongly suspects that Capitec is “approving loans to delinquent customers” so that they may assist them in paying existing loans, thereby engaging in “reckless lending practices”.

“As a consequence of re-financing delinquent loans, Viceroy believes Capitec’s loan book is massively overstated. Viceroy’s analysis against competitors suggests an impairment/write-off impact of ZAR 11bn will more accurately represent the delinquencies and risk in Capitec’s portfolio.” states the report.

Viceroy compares Capitec’s “concealed problems” to that of African Bank Investments before it collapsed in 2014.

Viceroy has appealed to independent director and chairman of Capitec’s audit committee Jean Pierre Verster, to “raise the concerns we highlight within this report to company auditors and recognize Capitec’s resemblance to his previous African Bank short.”

Read the report here.

Image credit: (Viceroy Research).


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