Interesting story behind the name of South Africa’s largest bank

[Nat Quinn]

Interesting story behind the name of South Africa’s largest bank

Capitec got its name by combining the words ‘Capital’ and ‘Technology’ to reflect a technologically advanced bank which is aspirational.

This was revealed in TJ Strydom’s book Capitec: Stalking Giants, which tells the tale of a small group of entrepreneurs who changed South Africa’s baking world forever.

These entrepreneurs turned a small network of microlending businesses into a challenger bank, which showed exceptional growth.

They changed the way banking was done in South Africa, with modern branches, using technology to make banking easier, and longer business hours.

“Right from the start, we made our mark by shaking up South Africa’s banking sector,” Capitec CEO Gerrie Fourie said.

“All our branches opened at 08:00, an hour before any of the other banks did. We also stayed open until 17:00, giving clients 67 more banking hours in a month.”

This formed part of their strategy to focus on four key values: accessibility, simplicity, affordability and personalised service.

At the time, South Africa’s big four banks, Absa, Standard Bank, FNB and Nedbank, were dominant and did business in traditional ways.

They were mainly focused on offering services to South Africa’s middle class, with millions of South Africans left without access to banking services.

Capitec’s founders focussed on the unbanked and proved that there was a strong demand for banking services among South Africa’s working class.

It went from 55 branches and 25,000 clients after opening the business on 1 March 2001 to 840 branches and 15 million clients twenty years later.

It transformed from a microlending business to a fully-fledged transactional bank, and its strong growth continued over the last three years.

In its latest financial results, Capitec revealed that it has grown its active client base to 23.2 million, with 12.4 million banking app clients.

The company is also entering business banking. In November 2019, it acquired Mercantile Bank and started offering services to South African businesses.

How Capitec Bank got its name

When the business was launched in 2001, it traded under Daxacom. It was suggested by founder and former chief executive Michiel Le Roux. However, it was not popular.

Le Roux wanted the name to be aspirational, and it needed to strongly suggest that the bank was technologically advanced.

“The new bank needed a strong brand name that would catch on quickly far and wide – something like Pep, Pepsi or Coke,” TJ Strydom wrote.

The group also took a page out of the late billionaire Anton Rupert’s book by pitching the brand’s image slightly above its target.

“Names were tested at a few of the branches. They were stuck onto bottles of tomato sauce where microlending clients sat down to have lunch,” Strydom wrote.

“Although Finaid was already an established brand, it did not move the needle. Daxacom also wasn’t popular.”

Daxacom had another problem. The pronunciation of c-, x-, and q-sounds in isiXhosa could cause confusion.

Smartfin founder Werner du Plessis came up with the name ‘Capitech’ – his combination of ‘capital’ and ‘technology’.

However, it ‘just did not look right on a whiteboard’. Carl Fischer, chief executive of marketing and corporate affairs, got up and drew a line through the ‘h’.

After he had sat down, there was a moment’s silence, and the team knew that Capitec was the right name.

Today, Capitec is one of the best-known and most powerful brands in South Africa and on the continent.

In 2023, Capitec was ranked as the second-strongest African banking brand and in 2024, it was recognized for being best at capturing market share.

SOURCE:Interesting story behind the name of South Africa’s largest bank – BusinessTech

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