Capitec Bank Holdings Limited · JSE:CPI
Capitec Bank — H1 2025 Earnings Presentation
40 slides from Capitec Bank's earnings presentation, August 2024
Slide 1: Unaudited financial results August 2024
Capitec Unaudited financial results August 2024
Slide 2: Questions to InvestorRelations@capitecbank.co.za
Please send any questions to InvestorRelations@capitecbank.co.za Questions will be answered at the end of the presentation.
Slide 3: Igniting growth and opportunity in a challenging environment
Igniting growth and opportunity in a challenging environment Global outlook • Low interest and inflation • Covid-19 • Persistent inflation • GNU optimism • Economic stability • High inflation • Rising interest rates • Normalised inflation • Global uncertainty • Russia / Ukraine war • Interest rate d
Slide 4: Simplified personal banking, 12.6 million clients (2019)
2019 Simplified Personal banking Transact Save Credit 12.6 million clients Insure 4
Slide 5: Diversified financial services group, 23.2 million clients
2024 Diversified financial services group Payments Personal Business Save Credit AvaFin 23.2 Connect million clients VAS Insure 5
Slide 6: Turning challenges into growth
Turning challenges into growth How did we accomplish this? Cloud technology Agile delivery Data, machine and architecture on client needs learning and AI Digital Innovative More than channels value-added 2.5 trillion products data points Amazon Connect Payment 80% faster solutions decisions New Busi
Slide 7: Resilient headline earnings
Resilient headline earnings From a retail bank to a diversified financial offering 36%* 6 394 9%* 8%* 4 697 4 322 3 987 2 948 650 Aug 2019 Aug 2020 Aug 2021 Aug 2022 Aug 2023 Aug 2024 7 *Percentage growth year on year calculated based on Rand million figures shown above
Slide 8: Capitec Group – Consolidated income statement
Capitec Group – Consolidated income statement Diversification drives growth in headline earnings 6 months ended Aug 24 YoY Change Aug 24 YoY Change Aug 23 R’ million (excl. AvaFin) (excl. AvaFin) (incl. AvaFin) (incl. AvaFin) Net interest income 8 018 8 848 10% 9 650 20% Credit impairment charge (4
Slide 9: Capitec Group – Key performance indicators
Capitec Group – Key performance indicators Positioned for growth Non-interest income to income from Annualised Return on ordinary operations after credit impairments credit loss ratio shareholders' equity 67% (August 2023: 74%) 7.6% (August 2023: 9.6%) 29% (August 2023: 24%) Net transaction and Valu
Slide 10: Business income statements
Business income statements Diversified income streams Personal banking Business banking Insurance Headline earnings R4 631 million Headline earnings R214 million Headline earnings R1 509 million 6 480 693 649 971 5 836 911 898 5 316 5 020 525 735 4 432 435 637 659 420 409 3 316 2 040 1 607 1 142 Aug
Slide 11: Personal banking
Personal banking Unlocking value for 23 million clients
Slide 12: Opportunities to grow the Capitec ecosystem
Opportunities to grow the Capitec ecosystem The power of scale Clients (million) 22.8 100% Client metrics 20.9 20.0 18.9 90% • Clients with inflows* over 16.7 80% R50 000 pm up 26% since Aug 2023 14.6 15.0 13.7 70% • Credit clients stable at 1.3 12.6 million 11.7 10.8 60% • Narrowing gap between act
Slide 13: Age ranges of our clients
Age ranges of our clients Age range SA population** Capitec share 18.8 million active clients 20 – 60 years old 0-19 21.3 million 8.5% 20-35 17.9 million 53.6% 36-60 16.9 million 54.4% >60 6.1 million 36.1% 12.0 CAGR* 8% 9.6 CAGR* 10.0 12% 9.2 8.0 6.0 4.0 CAGR* CAGR* 20% 23% 2.2 1.8 2.0 - 0 - 19 Yea
Slide 14: Credit
Credit Managing through tough economic times
Slide 15: Credit agility: unsecured credit sales
Credit agility Unsecured credit sales R’ billion Ahead of the market 50 Market (Excluding Capitec) Capitec 20 to 2024 Q1 45.1 43.7 41.8 Credit market stagnant 45 • 18 40.4 40 16 • Capitec cuts 28% • Focus on collections 35 14 30 12 12.4 25 10 20 8 15 7.5 7.4 6 6.3 6.3 10 4 5 2 0 0 2020 Q1 2021 Q1 20
Slide 16: Credit agility: debt review roll-ins
Credit agility Debt review roll-ins % of book* Decisive action cuts debt review 0.59% • Continuous debt review 0.54% education 0.53% • Pre-delinquency campaigns • Access to better treatments 0.46% 0.41% 0.42% 0.38% Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb FY 2023 FY 2024 FY 2025 *Performing b
Slide 17: Credit loss ratio
Credit loss ratio Returns to through-the-cycle target of 8.5% Delivered results • Proactive strategies • Agile granting management 11.0% • Book management 9.2% 8.5% 8.1% 7.6% 8.3% 5.4% Aug 20 Aug 21 Aug 22 Feb 23 Aug 23 Feb 24 Aug 24 17
Slide 18: Strategic sales growth
Strategic sales growth Loan sales and disbursements (including facility drawdowns) R’ billions Focus 4.8 • Products our clients need 4.5 • Diversified offering 4.5 4.5 • Digital channels 4.3 4.4 4.2 4.2 3.9 4.0 3.8 3.8 3.7 3.7 3.7 3.5 3.3 2.8 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb FY2023 FY
Slide 19: Diversified credit income streams
Diversified credit income streams Growing a healthy book Credit Card loan sales and Purpose lending loan sales and App sales 11 disbursements (R’ million) disbursements (R’ million) (R’ million) 341 910 10 9,745 791 810 9 710 Vehicles Home improvement 7,963 610 8 510 Education 7 410 139 6,299 310 23
Slide 20: Net transaction income
Net transaction income Driving growth
Slide 21: 21% growth from August 2023
21% growth from August 2023* Growth in net transaction and commission income reflects our ability to adapt to client needs +1.1bn 6 480 5 361 4 480 4 246 3 269 Aug 20 Aug 21 Aug 22 Aug 23 Aug 24 Net transaction and commission income (R’ million)* Cash and branch transactions are down to 11% of total
Slide 22: Card and digital payment options
Card and digital payment options Frictionless digital banking Cash & branch volumes Card volumes PayShap & Pay to Cell Capitec Pay volumes (million) (million) volumes* (million) (million) 95 1 336 92 320 310 136 1 070 94 1 200 52 976 48 Aug 23 Aug 24 Aug 23 Aug 24 Aug 23 Aug 24 Aug 23 Aug 24 Card no
Slide 23: Strategic initiatives
Strategic initiatives Delivering value within our ecosystem
Slide 24: Digital products drive growth
Digital products drive growth Value-added services net income grew 73% to R2.0 billion* VAS net income (R’ million) Market share 14% • Prepaid data & airtime – 40% 369% 684 • Prepaid electricity – 24% 644 599 • Lotto – 16% 66% • Vehicle licence disc renewal – 15% 440 • Bill payments – 34% 265 49% Ne
Slide 25: Evolution of Capitec Connect
Evolution of Capitec Connect Net income contribution R69 million – up from R4 million at August 2023 Data usage (petabytes) New expiring bundles launched Price (R) 0.90 1.4 2.9 5.1 30 MB 50 MB 1.50 1 day 100 MB 3.00 500 MB 13.00 250 MB 7.50 7 days 1 GB 29.00 2 GB 59.00 30 days 5 GB 135.00 30 minutes
Slide 26: Savings
Savings New competitive savings options
Slide 27: Savings
Savings Interest paid to clients has increased 9% to R4.1 billion* New notice deposits Deposit balances (R’ billion) • Launched July 2024 – 92 balance already R1.2 billion 87 (included in fixed deposits) 80 • Over 226 000 notice deposit 74 accounts opened 62 • Fixed and notice deposit accounts grew
Slide 28: Insurance
Insurance Laying foundations for future growth
Slide 29: Capitec Insurance
Capitec Insurance Funeral net income grew 14% and contributes 11% to group headline earnings Funeral sum assured Funeral performance indicators • Total active policies 3.0 million +22% • Lives covered 13.6 million +2.5 million • Average policy sum assured R135 583 +3% • Average policy premium R270 +
Slide 30: Capitec life cover
Capitec life cover Our unique product launched in June 57%* Simple and accessible life cover experience • No annual premium increases • 7 simple health questions with no blood tests 21%* • Get cover in less than 10 minutes • Pricing & risk scoring uses transaction data and credit data • Clients cont
Slide 31: Business bank
Business bank Empowering South African SMEs
Slide 32: Business banking transformed
Business banking transformed Accounts opened (‘000) A digitally-led, relationship-based solution 69 Business banking headline earnings decreased 12% • Fees reduced to align with Personal banking • Merchant commission rate decreased permanently • Card machine rental replaced by card machine sales Rel
Slide 33: Digital merchant commerce
Digital merchant commerce Empowering our merchant clients through innovative and integrated solutions Permanent decrease in commission rates (if settled into a Capitec account) Turnover bracket Debit card rate* Credit card rate* Under 499k 0.85% 1.85% 500k – 999k 0.70% 1.70% Over 1 million 0.60% 1.6
Slide 34: AvaFin
AvaFin Establishing our global footprint
Slide 35: Operational overview
Operational overview AvaFin contributed R66 million to group net profit for the 6 months ended 31 August 2024 Key KPIs • Over 197 000 active clients • €156 million value of loans advanced since 1 May 2024 • 8% of total group gross interest income on lending Value of loans advanced Strategic focus •
Slide 36: Group operating expenses
Group operating expenses Digitally enabled human-led growth
Slide 37: Total expenses increased by 24% to R8.2 billion
Total expenses increased by 24% to R8.2 billion* Short-term impact on profitability gears the group for long-term growth Operating expenses (R’ million) Growth in operating 3,998 expenses excluding salary incentives was 14% 2,977 2,770 • The share appreciation right 2,285 expense was impacted by sha
Slide 38: The future
The future Unlocking potential and helping South Africa grow
Slide 39: Future: Leverage the platform we built
Future Leverage the platform we built Long-term Optimise our Grow Continue to vision of Enhance our Single 23 million Develop our ecosystem payments Business service build our becoming a banking and data and AI global banking clients systems platform Insurance capabilities financial brand 39
Slide 40: Thank you
Thank you Please send any questions to InvestorRelations@capitecbank.co.za
Capitec Bank Holdings — H1 2025 Earnings Presentation on 6ix