March 27, 2018 / 6:51 AM / 24 days ago

UPDATE 1-South Africa's Capitec FY profit rises 18 pct, misses estimates

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JOHANNESBURG, March 27 (Reuters) - Capitec lagged estimates with an 18 percent rise in annual profit on Tuesday as South Africa’s fifth-largest lender pulls back from lucrative but risky unsecured loans in the face job losses and a weaker economy.

Launched in 2001 as a micro-lending business, Capitec is positioning itself as a fully-fledged bank with no-frills account, savings and insurance and credit card products to cut its reliance on unsecured loans, which rely solely on a customer’s promise to pay it back.

The company said diluted headline earnings per share (EPS) came in at 3,846 cents in the year ended February, slightly below a 3,883 cents forecast by Thomson Reuters’ SmartEstimates — which puts more weight on recent forecasts and those from historically accurate analysts.

Headline EPS, the widely watched profit measure in South Africa, strips out certain one-off items.

Capitec, which competes with Nedbank, Standard Bank , FirstRand and Absa Group, said net income from transaction fees jumped 31 percent to 5.1 billion rand ($437.27 million), while net income from lending was up 7 percent to 12.6 billion rand. ($1 = 11.6634 rand) (Reporting by Tiisetso Motsoeneng and Patricia Aruo, Editing by Sherry Jacob-Phillips and Louise Heavens)

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