Capitec

ALISHIA SECKAM: Patrick Mathidi, who is head of equity and balance funds at Aluwani Capital Partners is joining me now to put the spotlight on Capitec for a bit ...

I think this is a way Capitec can actually make a difference if they are able to come up with a credible product and a process that enables that top of the market to actually be onboarded, and offer them a credible service at a decent price. But I think the [proof] of the pudding will be whether they are able to actually offer them a decent product at a decent price, which then turns profitable in Capitec’s books. We like the quality of the business, but is the valuation that is a problem. PATRICK MATHIDI: Look, I think the number of clients being loaded is one statistic, but I think the important number is how profitable those clients coming in are. So they’re almost going the behavioural way of banking, where they look at how you behave and how you conduct accounts. ALISHIA SECKAM: Yeah. If we home in on that client base, the target market for this unit is businesses with a turnover of less than R100 million a year. So I think in the case of Capitec, especially in the SME space, we’ll have to see who is able to monetise that client base as and when [they] load those clients on their books. My guess that’s where the debate sits as to do we think that what they’ve achieved in the retail space they can do in the business banking side, especially with SMEs. This is a bank that is 20 years old and has literally run past the big four before in terms of market share, then the market cap. We have those who are forever believers who think that they can turn literally anything into gold, and then you’ve got the sceptics who kind of sit back and think, well, looking at the past certainly they’ve done very, very well. ALISHIA SECKAM: Patrick Mathidi, who is head of equity and balance funds at Aluwani Capital Partners is joining me now to put the spotlight on Capitec for a bit. I saw the headline last week – Business Day Live running on the back of a Financial Mail article – and I thought to myself, how many times have we read a similar headline: ‘Has Capitec run out of steam?’ How much added impetus do you see its banking business arm, with a target on SMEs in particular, adding?