CAPITEC: 132,896 -938 (-0.70%)
S.Africa's cbank refers Capitec loan products to regulator
(Updates with central bank comment)
JOHANNESBURG, July 3 (Reuters) - South Africa's central bank
said on Tuesday it had asked the National Credit Regulator (NCR)
to look into whether Capitec continued to use loan
products criticised for their fee structure.
Shares in the no-frills bank plunged 5 percent earlier on
Tuesday after a Bloomberg report, citing an unnamed source, said
the central bank had written a letter to the NCR asking it to
open a probe into Capitec's loan-origination charges.
The story was later corrected to remove reference to a
letter. Shares in Capitec pared earlier losses to close
down 3.94 percent at 853.00 rand.
The South African Reserve Bank (SARB) said, in an emailed
response to questions, it had told parliament on May 30 that it
met with the NCR and asked it to look into whether Capitec had
continued to use criticised "multi-loan products".
The request came after short-seller Viceroy Research said in
January that Capitec charged excessive fees on these products,
triggering a brief slump in its shares.
Capitec denied wrongdoing and said it had terminated the use
of those loan products in 2016 but Viceroy claims they were
simply rebranded under another name.
"The continued use of multi-loan products is a market
conduct issue and falls within the NCR responsibilities," SARB
said. "The SARB met with the NCR and requested that the
regulator take the matter forward."
NCR declined to comment on the matter.
Capitec officials could not be reached for comment on the
SARB statement but had earlier said media reports regarding the
central bank investigation were "misleading".
(Reporting by Tiisetso Motsoeneng and Tanisha Heiberg; editing
by Emelia Sithole-Matarise)
First Published: 2018-07-03 11:16:52
Updated 2018-07-03 18:26:47
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