South African billionaire Michiel Le Roux’s Capitec Bank eyes international markets
Key Points:
- Capitec Bank aims for global expansion within a decade, leveraging its acquisition of Cyprus-based Avafin, which operates in Europe and Latin America.
- Capitec CEO Gerrie Fourie highlighted plans to use Avafin’s presence in Poland, Latvia, Spain, the Czech Republic, and Mexico for growth.
- With over 22 million active clients in South Africa, Capitec’s robust digital platform positions it to diversify and extend credit solutions globally.
Capitec Bank, a leading retail bank co-founded and partly owned by South African billionaire Michiel Le Roux, has set its sights on becoming a global player within the next decade. This ambitious move follows its acquisition of Avafin, a Cyprus-based online lender with operations across Europe and Latin America.
Expansion into Europe and Latin America
Speaking at the company’s annual general meeting, Capitec CEO Gerrie Fourie outlined the strategic plan to leverage Avafin’s established presence in Poland, Latvia, Spain, the Czech Republic, and Mexico. This follows the regulatory approval secured in March, allowing Capitec to increase its stake in Avafin from 40.66 percent to a controlling 97.69 percent for €26.3 million (around R536.4 million).
“This acquisition is a perfect fit,” said Fourie. “With our digital platform encompassing retail and business banking, insurance, and strategic initiatives, Avafin offers a crucial diversification opportunity for Capitec’s global expansion.”
Domestic milestones surpassed, opportunities ahead
The acquisition of the Cyprus-based online lender comes as Capitec Bank surpasses another milestone in its home market, exceeding 22 million active clients in South Africa. This client base now matches the combined customer numbers of well-known competitors like Standard Bank, Absa, and Discovery Bank.
“With our established digital platform encompassing retail and business banking, insurance, and strategic initiatives, Avafin presents a perfect fit,” Fourie said. He emphasized the cultural alignment and the crucial diversification opportunity Avafin offers for Capitec’s global expansion.
Fourie also addressed the unique challenges and opportunities in Avafin’s markets. “Countries like Latvia have limited credit bureau presence, requiring us to use alternative data for client scoring and credit decisions. Typically, loans are issued for shorter terms with smaller initial amounts, gradually increasing as clients build their creditworthiness,” he explained.
Capitec Bank: Disrupting South Africa’s banking landscape
Capitec Bank, founded in 2001 by Michiel Le Roux, Jannie Mouton, and Riaan Stassen, has emerged as a dominant force in South Africa’s banking sector. The lender boasts a market capitalization of $13.9 billion, propelling Le Roux’s fortune to $1.3 billion on the back of his 11.39 percent stake in Capitec.
Capitec offers a comprehensive suite of transactional banking services and loan products, including term loans, credit facilities, and credit cards. The bank leverages a robust customer base and a cutting-edge digital platform to deliver a seamless banking experience.
Looking beyond South Africa, Capitec Bank, under CEO Gerrie Fourie, seeks to replicate its domestic success story in Avafin’s markets. “Our vision,” Fourie declared, “is to extend credit terms and introduce funding solutions to empower these clients.”