Data from Capitec shows South Africans are getting poorer.

The lender, which provides banking services to roughly one-third of the South African population, says its clients became poorer in the financial year to end-February as their income levels failed to keep up with inflation.

Despite reverting to more affordable products, the bank's clients spent 8% more on groceries on average, and 16% more on fuel, compared to a year before. 

Further, sharp interest rate increases through the year meant the value of the average loan debit order increased by 20%, and the average vehicle finance debit order grew by 15%.

This came as central banks hiked rates aggressively globally in an effort to keep inflation under control, with the fallout from load shedding expected to help cut SA's growth to almost zero in 2023. 

Recent statistics also reflect a continued decline in consumer confidence in South Africa. The FNB/BER Consumer Confidence Index plunged to -23 index points in the first quarter of 2023, from -8 points in the last quarter of 2022. This was the third-lowest reading on record since 1994.

The bank had 20.1-million active clients at the end of February, meaning it has access to the financial data of roughly a third of the population.

"This data allows us to understand our clients and the impact that the current deteriorating economic conditions are having on South Africans," it said in its 2023 financial results statement published on Tuesday.

In spite of these soaring costs, Capitec said the average increase in income into client accounts was just 4%. In the prior year, incomes were up 10%.

With its clients having less disposable income than before, and due to the significant increase in interest rates, Capitec reported a sharp rise in credit losses – a metric that refers to clients being unable to repay their loans.

In its retail banking division, Capitec's credit loss ratio increased to 8% in the year ending February, from 4.9% a year before.

In the 2020 financial year – which immediately preceded the pandemic – the credit loss ratio was 7.2%. Capitec said it had been working to relieve some strain on its clients.

Thanks to higher rates, interest paid on retail transactional accounts rose 80% year on year to R1.8 billion. A reduction in fees for SMS notifications, as well as the scrapping of charges on in-app notifications, saved clients R510-million, it said.