Capitec’s non-bank arm drives 28% of profit as VAS and Connect earnings hit $165 million

Capitec Bank, South Africa’s largest retail bank by number of clients, has recorded a $165 million (R2.7 billion) contribution to group headline earnings from its Capitec Connect and Value Added Services (VAS) in the six months ended 31 August 2026. As a result, non-bank entities accounted for 28.4% of total earnings, up from 26.3% in 2025.

Capitec Connect and VAS cover services such as prepaid airtime, data, electricity, money transfers, and mobile services, which are operations outside the Group’s banking operations. 

In an unaudited earnings report released on Wednesday, combined gross income from VAS and Capitec Connect rose 32% to $232.2 million (R3.8 billion). Gross net income from VAS alone rose 30% to R3.5 billion as the number of customers buying prepaid airtime, data, electricity and other services grew 14% to 13.5 million. VAS transactions rose 26% to 1.1 billion. 

Capitec Connect, the group’s mobile virtual network operator that sells mobile services over Cell C’s network, saw its gross net income surge by 72% to $17.3 million (R284 million). This represented nearly two-thirds of the $27 million (R442 million) it generated in the entire year 2025.

Active subscribers on the network in the past three months rose to 1.8 million from the 1.1 million recorded a year ago. Data usage also more than doubled to 34.3 petabytes, and voice minutes rose 84% to 573 million.

In its marketing strategy, the company introduced free calls (on the same lines) and raised the maximum airtime borrowing from $0.61 (R10) to $6.11 (R100). The development saw subscribers take up $6 million (R96.8 million) in Capitec Connect advances, up from $2.2 million (R36.1 million).

“Capitec Connect continued to scale as more clients used the product for affordable everyday connectivity. Growth was supported by increased numbers of active clients and higher usage across both data and voice services,” the group said in the earnings release. 

The bank’s diversification of its business into mobile services and fintech exploration is an attempt to expand operations and bolster its earnings. Specifically, the business frontline extension is now being explored by most leading African banks, including Standard Bank, Access Bank, and GTBank. 

Also read: With 711 new hires, Capitec Bank bets on AI to boost workers, not cut jobs.

Capitec Group earnings

Group headline earnings during the six months rose 19% to $580.6 million (R9.5 billion).

Operating expenses jumped 5% to $640.5 million (R10.5 billion), and the cost-to-income ratio fell to 36% from 40%. Technology spending outside salaries rose 8% to $103.7 million (R1.7 billion), largely driven by a 27% increase in cloud fees and a 20% rise in spending on outsourced technology resources.

In addition,  business banking headline earnings increased 52% to $37.1 million (R609 million) while the credit loss ratio climbed to 3.4% from 2.1%. 

There’s also massive usage of the group’s digital payments. Subscribers using Apple Pay, Google Pay, Samsung Pay and Garmin Pay jumped 68% to 2.4 million, pushing spending to increase by 87% to $3.18 billion (R52.1 billion). 

Banking app users increased to 16.5 million from 13.9 million. Capitec Pay, the group’s enterprise payments platform, processed 182 million payments worth $2.75 billion (R45 billion) for about 12.5 million clients, recording a net income surge of 51% to $22.3 million (R365 million).