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@pedant_pete that was Q2 numbers mate, Q3 came in softer
Been holding since the mid-3000s and the credit growth numbers last quarter were solid, but I need to flag that the net interest margin compression is real. At 4771.56 the valuation looks reasonable if they can keep cost-to-income below 50%, but that's the key watch. Still prefer this to the big four on a risk-reward basis for the next couple of years.
@bear_naidoo have you looked at their cost-to-income ratio improving though, or is that not enough for you
CPI at 4659 is trading at what, about 28x earnings? That dividend yield is barely 1.5% so you're banking on growth to justify the valuation, but their loan book expansion seems to be slowing. Where's the catalyst to push this higher from here?
CPI at R4600 is pricing in steady loan growth and NIMs holding up reasonably well, but you're paying for that quality. Dividend yield sits under 1.5% which means the market's betting on capital deployment rather than payouts to justify the multiple.
Picked up more CPI at 4628 given the consistent ROE and that dividend yield of 2.1% beats most bank peers, though I'd rather see earnings growth accelerate past the current 8% run rate.
CPI at R4609 trades on a P/E that's still above FirstRand and Absa despite slowing loan growth, which feels rich for a bank hitting maturity in its core market. The dividend yield doesn't compensate for that valuation gap when you look at what the big four are offering.
Capitec's structural advantage in retail lending and deposit gathering keeps it in the conversation for long-term holders, though valuation at these levels needs earnings growth to justify the multiple. The real question is whether credit impairments normalize further and whether
CPI down 1.91% today but the bank's ROE remains exceptional and loan book growth is still outpacing peers. At current valuations the multiple isn't screaming cheap, but the operational leverage when rates eventually come down could justify holding through this chop.
Capitec sitting at R4691 with that P/E still looking stretched for what is essentially a consumer lending play dependent on rate cycles. Show me the deposit growth and actual credit quality improvement before I get excited about another leg up.
CPI down half a percent today but the dividend yield at around 1.8% still feels skinny for a bank that's trading near record highs, so I'm staying on the sidelines until we see some profit growth to justify the valuation.
@pedant_pete fair points but aren't their smaller customer base actually more resilient than the majors right now?
I need to flag something on the credit impairment side. Capitec's stage 2 book has been creeping up on the back of load-shedding stress, and if that doesn't ease in the next two quarters the coverage ratios get interesting. At 4684.93 the price assumes things stabilise, but the deposit margin compression is real too. Still holding but not adding here.
I need to flag that CPI's net interest margin has been under real pressure for a while now, and at 4743.54 the valuation doesn't really compensate you for that. The deposit franchise is strong but margins are just getting squeezed harder than peers, and unless lending growth picks up materially it's a grind rather than a compounding story from here.
CPI's down 1.96% today but the real question is whether management can sustain loan growth without blowing out their cost-to-income ratio. At these valuations the market's pricing in perfection, so any hint of credit stress or margin compression could trigger a proper reset.
Current R 4 809,86 — 50% of range
Fundamentals sourced from JSE disclosures. Updated quarterly.