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Capitec Bank Holdings calls Viceroy Research report 'flawed and misleading'

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Capitec Bank Holdings calls Viceroy Research report 'flawed and misleading'

South African low- and middle-income lender Capitec Bank Holdings Ltd. released details from its loan book Feb. 5 to refute claims by Viceroy Research that it is overstating its book to investors.

The research firm had asked the South African Reserve Bank and the minister of finance to place Capitec into curatorship, alleging the bank was either fabricating new loans or issuing large numbers of loans to defaulting customers.

Capitec said Viceroy's report was "fundamentally flawed and misleading." It denied Viceroy's claim that it advanced new loans to customers who were in arrears or charged an initiation fee when rescheduling loans.

It also dismissed Viceroy's allegation that it might have to write down its loan book by 11 billion South African rand to reflect loan delinquencies, saying the research firm had failed to take into account Capitec's more "conservative" model for provisioning for bad debt, when comparing it to other lenders.

Shares in Capitec fell as much as 20% on the previous day's close when Viceroy's report released its report Jan. 30.

As of Feb. 5, US$1 was equivalent to 12.04 South African rand.