(By Songezo Ndlendle, ANA)

The allegations made by US researcher Viceroy that Capitec Bank takes significant impairments to its loans is incorrect, the bank’s CEO Gerrie Fourie said on Tuesday…

“They brought out a one-sided report which we believe a lot of things are factually, completely incorrect,” he said in a briefing in Cape Town.

Fourie said that Viceroy had not been in contact with the bank ahead of releasing its results.

Capitec further said it had given instructions to its attorneys to challenge the report by Viceroy because the bank was not happy with the way Viceroy had conducted its report.

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“They have neglected some of their roles in the research so we are concerned with the factualness of the report,” Fourie said.

He added that management had spoken to the bank’s financial team on Tuesday morning to get further analysis of the report in order to get better understanding regarding the report “because there are numerous things in the report that we don’t agree with”.

Shares dropped 20%

Shares in Capitec Bank tumbled as much as 20 percent on Tuesday after the announcement by Viceroy which said it had done extensive due diligence and that the company would likely find itself in a net-liability position.

Viceroy said its research showed that Capitec “is a loan shark with massively understated defaults masquerading as a community microfinance provider” and said the South African Reserve Bank and Minister of Finance should immediately place the bank into curatorship.

“As a consequence of re-financing delinquent loans, Viceroy believes Capitec’s loan book is massively overstated,” said Viceroy, which wrote a similarly damning report about Steinhoff before accounting irregularities were revealed at the retail company last December.

“We think that it’s only a matter of time before Capitec’s financials and business unravel, with macro headwinds creating an exponential risk of default and bankruptcy.”

Author: ANA Newswire