The South African Reserve Bank (SARB) has responded to Tuesday morning's report from the US-based fund manager Viceroy, stating that Capitec allegedly operates as a loan shark.
SARB says in a statement they monitor the safety and soundness of all banks, including Capitec Bank Limited (Capitec). According to all the information available, Capitec is solvent, well capitalised and has adequate liquidity the bank, according to their records meets all prudential requirements.
Shares in Capitec Bank tumbled 20 percent on Tuesday after research group Viceroy said it had done extensive due diligence and compiled evidence suggesting the company must take significant impairments to its loans which would likely result in a net-liability position.
In a hard-hitting report, Viceroy said its only a matter of time before Capitec’s financials and business unravel, with macro headwinds creating an exponential risk of default and bankruptcy.
Viceroy said based on its research and due diligence, it believes that Capitec is a loan shark with massively understated defaults masquerading as a community microfinance provider.
Capitec made a brief statement on their Twitter account saying "Shareholders are advised that Capitec has not been approached by Viceroy for insight into our business and none of their allegations has been discussed".
They say on the face of it, the report is filled with factual errors, material omissions in respect of legal proceedings against Capitec and opinions that are not supported by accurate information.
