$157m in VAS and 14m app clients: Capitec’s tech engine powers H1 results

South African banking giant Capitec Bank Holdings Limited has reported a set of results that underline how technology continues to reshape its business model.

For the six months ended August 31, 2025, the group delivered headline earnings of R8.0 billion ($465.155m), up 26% from R6.4 billion ($372.351m) in August 2024. While profitability gains spanned across personal banking, business banking, insurance, and international operations, the most striking story came from its digital and fintech performance.

The bank’s technology-driven strategy was evident in the surge of digital adoption. Digital transaction volumes grew by 17% to 1.4 billion, compared to 1.2 billion in 2024. The number of clients transacting digitally reached 14.8 million, with the banking app alone serving 13.8 million clients.

The app now accounts for 93% of all digital transactions, up from 88% in 2024, reinforcing its position as the primary client interface.

Card payment and other point-of-sale (POS) transaction volumes rose by 23% to 1.6 billion (2024: 1.3 billion). Net income from these card payments increased by 8% to R849 million, compared to R783 million in 2024. International payment income grew even faster, up 45% to R318 million (2024: R220 million).

Capitec has also deepened integration with global payment ecosystems. Apple Pay, Garmin Pay, Google Pay, and Samsung Pay spend doubled to R27.8 billion ($1.617 billion), compared to R13.7 billion ($797.373 billion) in 2024. Volumes jumped to 157 million transactions from 68 million in 2024.

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On the domestic front, the bank’s leadership in the PayShap real-time payments system was extended. Capitec recorded 2.4 million main bank registrations, equal to a 56% market share (2024: 55%). Incoming volumes reached 126.4 million (2024: 20.4 million) and outgoing volumes 68.2 million (2024: 32.2 million). Its market share of all incoming volumes rose to 54% (2024: 26%), although outgoing market share dropped to 26% from 61% as rival banks scaled their adoption.

Fintech expansion: VAS and Capitec connect

Capitec’s fintech division, comprising Value-Added Services (VAS) and Capitec Connect, contributed R2.1 billion ($122.180m) to group headline earnings, up from R1.5 billion ($87.299m) in 2024.

Net income from VAS grew by 36% to R2.7 billion (2024: R2.0 billion). The number of clients using VAS increased to 11.8 million from 10.7 million in 2024, while transaction volumes rose to 845 million, compared to 704 million.

The bank’s send cash service saw rapid uptake. The number of clients using the feature increased to 5.4 million from 1.2 million in 2024, with income rising 56% to R685 million ($39.865m).

In August 2025, Capitec launched a cross-border money transfer product in collaboration with MamaMoney. Early adoption figures show 3,888 clients already making use of the service to send funds to countries including Zimbabwe, Malawi, Mozambique, Kenya, Tanzania, Uganda, Zambia, and Lesotho.

VAS expansion also included the August 2025 launch of airtime advances, allowing clients to purchase airtime on networks beyond Capitec Connect when balances are insufficient. Vehicle licence renewals, another VAS product, reached 46,220, pushing the bank’s market share to 17.6%, compared to 15% in 2024.

Capitec Connect, the bank’s mobile connectivity service, also delivered strong growth. Net income rose to R165 million ($9.601m) from R69 million ($4.015m) in 2024.

Active users in the last three months reached 1.1 million, up from 0.6 million, while data usage surged by over 100% to 14.9 petabytes from 5.1 petabytes. Voice usage also more than tripled to 311 million minutes compared to 95 million in 2024. Since 1 March 2025, Capitec has rewarded clients with 449 terabytes of data.

Technology-enabled product innovation

Capitec continued to leverage technology for product innovation during the period. Its accessible credit card, launched in February 2025, now has limits ranging from R600 to R500,000. More than 64,000 low-limit cards have been issued, enabling younger clients to begin building credit profiles. Credit card clients also benefit from 1% cash back on purchases, 1GB of free Capitec Connect data monthly, and zero forex commission on international card payments.

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The bank also rolled out a repay-as-you-earn loan in July 2025, designed for multiple income earners and small and medium-sized enterprises. The product generated R8.3 million in loan disbursements within its first six weeks. Loans to multiple income earners grew by 81% to R984 million, while purpose loans reached R1.8 billion compared to R640 million in 2024.

Another notable innovation was the availability of affordable smartphones for purchase directly through the Capitec app. Clients are able to finance these devices via new advances launched during the reporting period, tying smartphone ownership more closely to the banking relationship.

Underlying these product and service innovations was a sharp rise in technology spending. Information technology (IT) expenses increased by 33% to R1.6 billion, compared to R1.2 billion in 2024. Capitec attributed the higher outlay to accelerated investment in innovation and strategic projects, enabled by its strong financial performance.

This scale of technology investment was reflected in its operating cost base. Group operating expenses grew 16% to R10.0 billion, of which IT accounted for a material share. The expenditure highlights the bank’s ongoing commitment to expanding its digital ecosystem, enhancing security, and scaling its infrastructure to support growth in app and fintech usage.

Capitec’s half-year results demonstrate the extent to which technology has become central to its growth strategy. Digital banking adoption is deepening, app usage continues to expand, and global payment integration is broadening its footprint.

The fintech arm, led by VAS and Capitec Connect, is delivering material earnings contributions, while innovations such as cross-border remittances, airtime advances, and smartphone financing reinforce its role in clients’ daily lives.