Financial Results March 2016
Content Key indicators Growth Credit Capital / Liquidity The way forward Financial Results 2
key indicators Capitec Bank Limited 3
Key Indicators Headline earnings (R m) 4 000 3 500 3 222 3 000 2 500 2 547 2 000 1 500 1 584 2 017 1 000 500 212 302 437 640 1 078-2008 2009 2010 2011 2012 2013 2014 2015 2016 Financial Results 4
Key Indicators Return on equity (%) 40 35 32 34 30 25 22 27 29 27 23 25 27 20 15 10 5 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 Financial Results 5
Key Indicators Total assets (R m) 65 000 60 000 55 000 50 000 45 000 40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000-2 936 4 969 9 488 14 440 23 622 16 863 27 935 30 053 Financial Results 6 5 750 38 347 9 166 46 191 1 715 14 423 53 916 1 677 19 755 32 484 24 989 35 760 2008 2009 2010 2011 2012 2013 2014 2015 2016 Loans and advances Cash, cash equivalents and other liquid assets Other 62 945 2 196
Key Indicators Cost to income ratio (%) 70 60 58 54 54 50 48 44 40 38 32 35 34 30 20 10-2008 2009 2010 2011 2012 2013 2014 2015 2016 Financial Results 7
Key Indicators Net transaction fee income to operating expenses (%) 70 65 66 60 59 50 45 40 34 30 29 20 15 22 10 10 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 Financial Results 8
Key Indicators Net transaction fee income to net income (%) 40 35 32 34 33 30 25 22 26 20 18 19 15 10 11 15 5 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 Financial Results 9
growth
Growth Primary banking clients Higher income profile clients More transactions per clients Distribution Financial Results 11
Growth Primary banking clients ( 000) Financial Results 12
Growth Primary banking client market share AMPS (%) 25 20 19 21 15 10 5 7 8 5 5 9 6 11 8 13 10 14 12 17 13 15 17 0 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 National Gauteng Financial Results 13
Growth Client profiles Year on year growth Active clients % 16 Primary banking clients % 21 Gauteng clients % 24 Higher income clients (R15 000 plus) % 44 Financial Results 14
Growth Transaction volumes & clients served ( 000) 250 000 6 401 7 000 200 000 5 172 5 124 202 480 6 000 5 000 Transactions 150 000 100 000 3 352 86 636 4 024 4 044 104 215 98 867 146 101 134 978 4 000 3 000 Clients 2 000 50 000 1 000 - Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 - Transactional volumes Tickets handled Financial Results 15
Growth Transaction activity Banking clients do 5 times more transactions than non-banking Transaction growth: Total transaction activity % 40 Branch / ATM / POS % 38 APP / USSD / Internet % 67 Bank app transaction volume: March 2015 to August 2015 m 4.2 September 2015 to February 2016 m 8.4 Financial Results 16
Growth Net transaction fee income (R m) 3 500 3 000 3 020 2 500 2 608 2 000 1 927 1 500 1 349 1 000 500 0 836 532 295 89 160 2008 2009 2010 2011 2012 2013 2014 2015 2016 Financial Results 17
Growth Distribution Changes for 12 months Change since Feb-15 Total Feb-16 Branches New 52 720 Upgraded 10 10 Own ATMs Regular 135 968 Dual note recyclers 160 268 Partnership ATMs Capitec branded 401 651 Light branding (409) 1 818 Financial Results 18
credit
Credit Market conditions Loans advanced Model criteria Collections / provisions Financial Results 20
Credit Market conditions Economy Employment Mining industry Credit legislation Financial Results 21
Credit Market conditions Rising retrenchments and debt review 45 000 40 000 35 000 35 984 38 508 39 911 30 000 25 000 20 000 15 000 10 000 7 059 8 242 10 593 5 000-2013 2014 2015 Information for the calendar year Debt Review Retrenchment letters Financial Results 22
Credit Market conditions improving client health profile Clients with > 40% cash available after commitments Feb-13 Feb-14 Feb-15 Feb-16 Total % 61 64 68 75 Government % 55 60 64 71 Private sector % 70 70 75 80 Clients with < 20% cash available after commitments Feb-13 Feb-14 Feb-15 Feb-16 Total % 19 16 12 9 Government % 21 17 13 9 Private sector % 14 15 10 8 Financial Results 23
Credit Value of new loans advanced (R m) 30 000 25 000 25 401 24 228 20 000 19 393 18 214 19 417 15 000 14 318 10 000 8 645 5 000 5 162 6 273-2008 2009 2010 2011 2012 2013 2014 2015 2016 Financial Results 24
Credit Loans advanced by product 100% 28% 19% 9% 75% 46% 34% 30% 27% 50% 23% 16% 27% 25% 25% 11% 20% 29% 24% 32% 0% Feb-13 Feb-14 Feb-15 Feb-16 1-12 month 13-36 month 37-60 month 61-84 month Financial Results 25
Credit Model criteria Credit application (%) Feb-14 Feb-15 Feb-16 Application decline rate 54 52 46 Application approved: not taken up 15 15 13 Application taken up rate 31 33 41 Total 100 100 100 (Restated for 2014 & 2015) Financial Results 26
Credit Collections / provisions Arrears & impairment provisions of gross loans & advances Feb-14 Feb-15 Feb-16 Gross loans & advances R'm 33 690 36 341 40 891 Loans past due (arrears) R'm 2 174 1 964 2 297 Arrears to gross loans and advances % 6.5 5.4 5.6 Arrears and arrears rescheduled < 6 months R'm 2 921 2 848 3 839 Arrears and arrears rescheduled < 6 months to gross loans % and advances 8.7 7.8 9.4 Provisions for doubtful debts R'm 3 637 3 857 5 131 Provisions for doubtful debts to gross loans & advances % 10.8 10.6 12.5 Arrears coverage ratio % 167 196 223 Arrears and arrears rescheduled < 6 months coverage ratio % 125 135 134 Financial Results 27
Credit Loans and advances - rescheduling R'm 2016 % 2015 % Current Gross 35 234 32 363 Provisions (2 697) 8% (2 128) 7% Net 32 537 30 235 Current - Rescheduled from current not rehabilitated Gross 1 818 1 130 Provisions ( 288) 16% ( 206) 18% Net 1 530 924 Current - Rescheduled from arrears not rehabilitated Gross 1 542 884 Provisions ( 758) 49% ( 367) 42% Net 784 517 Arrears Gross 2 297 1 964 Provisions (1 388) 60% (1 156) 59% Net 909 808 Grand Total Total gross 40 891 36 341 Total impairment (5 131) (3 857) Net 35 760 32 484 Financial Results 28
capital / liquidity
Capital / Liquidity Conservative capital and funding Well capitalised Brand acceptance Positive savings returns Dividend cover Financial Results 30
Liquidity Deposits (R m) 25 000 22 500 20 000 17 500 15 000 12 500 10 000 7 500 5 000 2 500-2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Retail call Retail fixed Wholesale Financial Results 31
the way forward
The way forward Growth prospects 1. Economy Price sensitivity Disposable income Unemployment / informal market 2. Banking Value offer Higher income clients App enhancement 3. Credit Facility Credit card Regulatory Financial Results 33
The way forward Operational focus Service quality People Quality clients IT keeping up and gearing for change Remote experience Financial Results 34
thank you Financial Results 35