The South African Reserve Bank (SARB) on Tuesday disagreed with the U.S. based company, Viceroy Research, about Capitec bank, the second largest retail bank in the country.
The SARB issued a statement after the Viceroy Research released a report where they accused the South Africa bank of operating like a loan shark. They called the bank “wolf in a sheep skin.” They questioned how Capitec Bank could out-perform all major commercial banks globally while targeting low-income earners.
SARB said they note a report by a U.S. based fund manager, “As part of our mandate, we monitor the safety and soundness of all banks, including Capitec Bank Limited (Capitec). According to all the information available, Capitec is solvent, well capitalized and has adequate liquidity. The bank meets all prudential requirements,” said the SARB.
Capitec bank confirmed on their facebook page that they received the Viceroy Research report Tuesday morning. However, the Viceroy Research did not approach them for insight into their business. They stated that none of their allegations have been discussed, tested or verified with management.
“We believe our corporate governance is strong and our communications and disclosures are, and always have been transparent, clear and to the point. 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,” said Capitec.
In a statement released later in the day by Capitec bank, they dismissed the allegations by the U.S. based research company as “inaccurate.” The bank said it is public record that they took three of their customers to court over money loaned to them. Viceroy Research said the court cases by Capitec could result in class action which the bank dismissed and said they have defense to the allegations.
The U.S. research company said they got the information about the bank from former employees. Capitec bank said, “Employees who are no longer employed by an organization can make claims that are false. It is patently untrue that Capitec has fired any employees for not deceiving borrowers’.”
Capitec bank also said Viceroy Research have inaccurate information about the money paid to the bank branch managers. The South African bank is mooting legal action against the U.S. research company. Capitec said, “We are concerned about the way in which Viceroy Research conduct their business and our attorneys have registered a formal complaint with the Financial Services Board.” Enditem