Capitec Bank Holdings Limited · JSE:CPI

Capitec Bank — FY2016 Earnings Presentation

35 slides from Capitec Bank's earnings presentation, March 2016

1. Slide 1: Financial Results March 2016

   Financial Results March 2016

2. Slide 2: Content

   Content • Key indicators • Growth • Credit • Capital / Liquidity • The way forward © 2016 Capitec Bank Financial Results 2

3. Slide 3: Key indicators

   key indicators © Capitec Bank Limited 3

4. Slide 4: Key Indicators: Headline earnings

   Key Indicators Headline earnings (R’m) 4 000 3 500 3 222 3 000 2 547 2 500 2 017 2 000 1 584 1 500 1 078 1 000 640 500 437 302 212 - 2008 2009 2010 2011 2012 2013 2014 2015 2016 © 2016 Capitec Bank Financial Results 4

5. Slide 5: Key Indicators: Return on equity

   Key Indicators Return on equity (%) 40 35 34 32 30 29 27 27 27 25 25 23 22 20 15 10 5 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 © 2016 Capitec Bank Financial Results 5

6. Slide 6: Key Indicators: Total assets

   Key Indicators Total assets (R’m) 65 000 62 945 60 000 2 196 53 916 55 000 1 677 50 000 46 191 24 989 45 000 1 715 38 347 19 755 40 000 14 423 35 000 9 166 30 000 23 622 25 000 20 000 5 750 14 440 35 760 15 000 30 053 32 484 27 935 9 488 10 000 4 969 16 863 5 000 2 936 - 2008 2009 2010 2011 2012 201

7. Slide 7: Key Indicators: Cost to income ratio

   Key Indicators Cost to income ratio (%) 70 60 58 54 54 50 48 44 40 38 35 34 32 30 20 10 - 2008 2009 2010 2011 2012 2013 2014 2015 2016 © 2016 Capitec Bank Financial Results 7

8. Slide 8: Key Indicators: Net transaction fee income to operating expenses

   Key Indicators Net transaction fee income to operating expenses (%) 70 65 66 59 60 50 45 40 34 29 30 22 20 15 10 10 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 © 2016 Capitec Bank Financial Results 8

9. Slide 9: Key Indicators: Net transaction fee income to net income

   Key Indicators Net transaction fee income to net income (%) 40 35 34 33 32 30 26 25 22 20 19 18 15 15 11 10 5 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 © 2016 Capitec Bank Financial Results 9

10. Slide 10: Growth

    growth

11. Slide 11: Growth

    Growth • Primary banking clients • Higher income profile clients • More transactions per clients • Distribution © 2016 Capitec Bank Financial Results 11

12. Slide 12: Primary banking clients ('000)

    Growth Primary banking clients (‘000) © 2016 Capitec Bank Financial Results 12

13. Slide 13: Primary banking client market share – AMPS

    Growth Primary banking client market share – AMPS (%) 25 21 20 19 17 17 15 15 14 13 13 12 11 10 10 9 8 8 7 6 5 5 5 0 Jun 11 Dec 11 Jun 12 Dec 12 Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 National Gauteng © 2016 Capitec Bank Financial Results 13

14. Slide 14: Client profiles

    Growth Client profiles Year on year growth Active clients % 16 Primary banking clients % 21 Gauteng clients % 24 Higher income clients (R15 000 plus) % 44 © 2016 Capitec Bank Financial Results 14

15. Slide 15: Transaction volumes & clients served

    Growth Transaction volumes & clients served (‘000) 250 000 7 000 6 401 202 480 6 000 200 000 5 172 5 124 5 000 Transactions 4 024 4 044 146 101 150 000 134 978 4 000 Clients 3 352 104 215 98 867 3 000 100 000 86 636 2 000 50 000 1 000 - - Jun 13 Dec 13 Jun 14 Dec 14 Jun 15 Dec 15 Transactional volum

16. Slide 16: Transaction activity

    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 ©

17. Slide 17: Net transaction fee income

    Growth Net transaction fee income (R’m) 3 500 3 020 3 000 2 608 2 500 2 000 1 927 1 500 1 349 1 000 836 532 500 295 160 89 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 © 2016 Capitec Bank Financial Results 17

18. Slide 18: Distribution

    Growth Distribution Changes – for 12 months Change Total since Feb-15 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 © 2016 Capitec Bank Financial Results 18

19. Slide 19: Credit

    credit

20. Slide 20: Credit

    Credit • Market conditions • Loans advanced • Model criteria • Collections / provisions © 2016 Capitec Bank Financial Results 20

21. Slide 21: Market conditions

    Credit Market conditions • Economy • Employment • Mining industry • Credit legislation © 2016 Capitec Bank Financial Results 21

22. Slide 22: Rising retrenchments and debt review

    Credit Market conditions Rising retrenchments and debt review 45 000 39 911 40 000 38 508 35 984 35 000 30 000 25 000 20 000 15 000 10 593 10 000 8 242 7 059 5 000 - 2013 2014 2015 Debt Review Retrenchment letters Information for the calendar year © 2016 Capitec Bank Financial Results 22

23. Slide 23: Market conditions – improving client health profile

    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 %

24. Slide 24: Value of new loans advanced

    Credit Value of new loans advanced (R’m) 30 000 25 401 25 000 24 228 20 000 19 393 19 417 18 214 15 000 14 318 10 000 8 645 6 273 5 162 5 000 - 2008 2009 2010 2011 2012 2013 2014 2015 2016 © 2016 Capitec Bank Financial Results 24

25. Slide 25: Loans advanced by product

    Credit Loans advanced by product 100% 9% 19% 28% 75% 46% 34% 30% 27% 50% 25% 23% 16% 27% 25% 11% 29% 32% 24% 20% 0% Feb-13 Feb-14 Feb-15 Feb-16 1 - 12 month 13 - 36 month 37 - 60 month 61 - 84 month © 2016 Capitec Bank Financial Results 25

26. Slide 26: Model criteria: credit application

    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) © 2016 Capitec Bank Financial Results 26

27. Slide 27: Collections / provisions

    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

28. Slide 28: Loans and advances - rescheduling

    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 rehab

29. Slide 29: Capital / Liquidity

    capital / liquidity

30. Slide 30: Conservative capital and funding

    Capital / Liquidity Conservative capital and funding • Well capitalised • Brand acceptance • Positive savings returns • Dividend cover © 2016 Capitec Bank Financial Results 30

31. Slide 31: Liquidity: Deposits

    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 © 2016 Capitec Bank Financial Results 31

32. Slide 32: The way forward

    the way forward

33. Slide 33: Growth prospects

    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 © 2016 Capitec Bank Financial Results 33

34. Slide 34: Operational focus

    The way forward Operational focus • Service quality • People • Quality clients • IT – keeping up and gearing for change • Remote experience © 2016 Capitec Bank Financial Results 34

35. Slide 35: Thank you

    thank you © 2016 Capitec Bank Financial Results 35

Capitec Bank Holdings — FY2016 Earnings Presentation on 6ix