Capitec

[Siener]

Capitec is really plunging since last Friday's announcement on proposed new maximum interest rates. Capitec still makes more than 80% of its profits from unsecured lending, and if new rates are implemented, it could really hurt margins and profits big time. That's why Capitec doesn't deserve a high rating - it's an inherently risky business model compared to say, mortgage lending that's backed up by secured assets. In addition, at such high rates & margins (fueling consumption, not asset formation), the government was bound to intervene. That's biggest mistake of investors - mis-pricing risk.

[CHATTYCHAT]

Although a different model in comparison, Capitec makes me think of the late BankOVS which ran wild in the vehicle finance business in the '70ies. Then their bubble burst because of unpaid debt.