Profits of Capitec, South Africa’s fastest-growing and JSE-listed lowcost bank, were a little bit restrained in the year to February 2014 after a decade of outstanding growth each year, the bank said on Wednesday.

The Stellenbosch-based lender said earnings for the period under review had gained 15 percent to R2 billion ($186,1m), buoyed by robust transaction banking and cost management. Stellenbosch is a small university town situated a couple of kilometres from Cape Town.

Capitec said the financial period under review has seen the quality of its loan book weaken somewhat. Loans written in 2012 are presently performing badly than projected but on average are nevertheless within the lender’s initial desire for risk.

“From the early evidence available we can see that the newer loans are performing in line with expectations and our lower risk appetite. This is a result of the actions taken to mitigate the deterioration in book quality,” it said in a statement.

The bank’s unsecured credit business – which provides loans to applicants without needing any collateral – is founded on considering the future ability of salary-earners to pay back loans.

So when the economy of the country continues to perform badly and shed jobs many salary-earners fail to pay back their loans.