Capitec Bank Holdings Limited · JSE:CPI
Capitec Bank — Non-Deal Roadshow (April 2008)
47 slides from Capitec Bank's roadshow presentation, April 2008
Slide 1: Innovative Thinking in Retail Banking
Innovative Thinking in Retail Banking Investor Pre - Roadshow Presentation April 2008 1
Slide 2: Our Focus
Our Focus Individuals in need of basic low cost banking 2
Slide 3: We deliver on four core needs
We deliver on four core needs: • Accessibility • Affordability • Simplicity • Personal Service 3 3
Slide 4: The Unique Business Model
The Unique Business Model Unique / Innovative Technology Providing Simplified / Focused Product Range Via Customer Focused – Low Cost Delivery Channels Annuity Transactions ATM POS Branches INTERNET Mobile Bank CAD 4 4 CELL
Slide 5: The Capitec Bank Revolution
The Capitec Bank Revolution Our Technology Platform •Features • Paperless • Process Driven • Real Time Delivery • Cashless • Central Control – no branch back office • Handle high volume transactions efficiently •Structure • Open Platform • Windows-based • Scaleable 5 5
Slide 6: Simplified Focused Product Offer - Structure
Simplified Focused Product Offer - Structure Transactions • Purchases • Transfers • Debit orders • Stop orders Multi loan Savings Account 1 / 3 / 6 month loans 12 / 18 / 24 / 36 Focus Save month term Accounts loans Cash Wallet 6 6
Slide 7: Simplified Focused Product Offer - Price
Simplified Focused Product Offer - Price Savings and Transactions • Aggressive Loans • Competitive 7 7
Slide 8: Our People
Our People • Cultural alignment • Service driven • Recruit for potential, train for skill • Team approach • Zero to hero in 7 weeks Firm Foundations • Ongoing investment in competency E Learning 8 8
Slide 9: The Market
The Market Average Income Spread LSM Number Income % (People million) 1 2.1 R 0–R 947 7 2 3.8 R 949 – R 1 179 12 3 3.8 R 1 179 – R 1 443 13 4 4.5 R 1 443 – R 1 977 15 5 4.1 R 1 977 – R 2 549 13 Target 6 4.3 R 2 549 – R 4 366 14 Market 7 2.3 R 4 366 – R 6 659 8 17m 8 1.7 R 6 659 – R 9 388 6 9 1.9 R 9
Slide 10: Client Base
Client Base 02/07 02/08 Salary clients only 78 368 158 005 Loan clients only 236 092 348 966 Loan & salary clients 132 712 170 922 Sub-total 447 172 677 893 Savings clients 563 107 693 283 Total 1 010 279 1 371 176 10 10
Slide 11: Salary Clients Age
Salary Clients Age 45 41.83 40 35 27.23 30 25 % 20 15.74 15 10 6.58 5.73 2.90 5 - 18 - 20 21 - 30 31 - 40 41 - 50 51 - 60 61+ 11 11
Slide 12: Loan Clients Age
Loan Clients Age 40 35 30 25 % 20 15 10 5 - 18 - 20 21 - 30 31 - 40 41 - 50 51 - 60 60+ Male Female 12 12
Slide 13: Loan Clients Income Level
Female Male No Prediction R15000+ R10000 - 14999 R7500 - R9990 Loan Clients Income Level R5000 - R7499 R4000 - R4999 R3000 - R3999 R2000 - R2999 R1000 - R1999 R1- R999 5 30 25 20 15 10 - % 13 13
Slide 14: History
History 1. Microlending 2. Bank (2000/1) - Management team - Determining strategy - Bank licence - PASA membership - IT platform 3. Conversion - Microlending to bank - Deposit taking - Client conversion to bank with Capitec 4. Growth Strategy 14 14
Slide 15: Group & Operations Structure
Group & Operations Structure Management Non-ex directors PSG Group BEE groups & Other 8.79% (excl black directors) 34.9% individuals 24.53% 15.79% 15.99% CAPITEC BANK HOLDINGS (CBHL) Listed and registered as a bank controlling company 100% 75% 100% Key Distributors Capitec Bank Other (FMCG wholesale
Slide 16: Management
Management • CEO Riaan Stassen (54) • CFO Andre du Plessis (46) • Other Executives: - IT Chris Oosthuizen (53) - Risk Christian van Schalkwyk (52) - Human Resources Leon Venter (46) - Operations/Sales Gerrie Fourie (44) - Marketing & Corporate Affairs Carl Fischer (51) - Credit Risk Jaco Carstens (3
Slide 17: Employment Equity Profile
Employment Equity Profile Target 2004 2008 Senior Management 20% 8% 11% Middle management 30% 15% 25% Junior Management 40% 18% 50% Rest 82% 81% 93% 17 17
Slide 18: Key Risks and Mitigants
Key Risks and Mitigants • Credit • Liquidity • Regulatory • Systems • Interest rate • Taxation 18 18
Slide 19: Liquidity Management
Liquidity Management - Banking Crisis 2000/1 - Philosophy • Caution : top priority (even over profitability) • Retail deposits - payout when requested - cash usage - short term loans • Facilities - don't bank on it - used for convenience • Fixed vs fluctuating rates • Forex - cover all positions - n
Slide 20: Liquidity - History
Liquidity - History • Initial strategy – Self funding • Build trust – Retail savings deposit base • Wholesale funding agreements • Un-published ratings • Preference shares • Published ratings • BBEE • Short term corporate paper • DMTN • Retail term deposit base 20 20
Slide 21: Basel II – Pillar 1
Basel II – Pillar 1 Minimum Regulatory Capital Requirement Basel I Feb 2007 79% Dec 2007 51% Basel II (BIA) Dec 2007 37% Feb 2008 36% Basel II (ASA) Feb 2008 58% 21 21
Slide 22: Basel II – Pillar 2
Basel II – Pillar 2 The Supervisory Review Process • Supervisory Review and Evaluation Process (SREP) • Risk Management • Capital Management • Capitec Internal Capital Assessment Process (CICAAP) • Foundation Internal Ratings Based approach (FIRB) for credit risk 22 22
Slide 23: Basel II – Pillar 3
Basel II – Pillar 3 Market Discipline • Regulation 43 Public disclosures • Quarterly, Bi-annual and Annual disclosures • Dedicated Website Page under Investor relations 23 23
Slide 24: National Credit Act (NCA)
National Credit Act (NCA) Act • Income components & ceilings • Procedures, rules & output • Debt counseling & mediation VAT leakage Opportunity Strategy (pre-empting effect) 24 24
Slide 25: Financial Highlights
\ SS Financial Highlights
Slide 26: Holdings vs Bank results
Holdings vs Bank results - IFRS Holdings : Equity settled in Statement of Changes in Shareholders Equity Bank : Cash settled through Income Statement 26 26
Slide 27: Loans Advanced
Loans Advanced 6,000 5,162 4,500 3,449 2,863 3,000 2,259 Rm 1,904 1,477 1,500 0 2003 2004 2005 2006 2007 2008 27 27
Slide 28: Number of Loans Advanced
Number of Loans Advanced 3500 3155 2924 3000 2617 2650 2454 2486 2500 2000 '000 1500 1000 500 0 2003 2004 2005 2006 2007 2008 28 28
Slide 29: Loans advanced per product
Loans advanced per product R’m 2007 % 2008 % 1 Month 1600 46 1 692 33 3 Month 687 20 757 15 6 Month 392 11 314 6 12 Month 425 12 797 15 18 Month 190 6 430 8 24 Month 155 5 774 15 36 Month - 398 8 3 449 5 162 29 29
Slide 30: Impairment per product
Impairment per product % 1 3 6 12 18 24 36 Month Month Month Month Month Month Month 2008 1.05 3.83 5.14 10.18 12.99 15.78 29.37 2007 1.61 3.16 6.85 13.13 24.30 21.65 - 30 30
Slide 31: Net Transaction Fee Income
Net Transaction Fee Income 90 79 80 70 60 50 R'm 40 35 30 20 15 10 0 4 0 0 2003 2004 2005 2006 2007 2008 31 31
Slide 32: Value of Savings Deposits
Value of Savings Deposits 900 838 800 700 600 554 500 R'm 400 314 300 200 4 74 100 0 0 2003 2004 2005 2006 2007 2008 32 32
Slide 33: Operations
Operations 33
Slide 34: Bank Branches
Bank Branches 400 331 280 300 251 253 200 148 100 44 0 2003 2004 2005 2006 2007 2008 Number 34 34
Slide 35: ATMs
ATMs 800 765 700 600 500 407 400 No 300 180 210 200 75 100 58 0 2003 2004 2005 2006 2007 2008 35 35
Slide 36: Employees
Employees 3,000 2,800 2,500 2,129 1,901 2,000 No 1,708 1,402 1,500 1,180 1,000 2003 2004 2005 2006 2007 2008 36 36
Slide 37: Profitability
Profitability 37
Slide 38: Headline Earnings
Headline Earnings 250 212 200 160 150 116 R'm 100 70 47 50 30 0 2003 2004 2005 2006 2007 2008 38 38
Slide 39: Headline Earnings per Share
Headline Earnings per Share 300 259 250 222 200 165 Cents 150 101 100 70 45 50 0 2003 2004 2005 2006 2007 2008 39 39
Slide 40: Return on Equity
Return on Equity 30 26 23 22 20 16 12 % 10 8 0 2003 2004 2005 2006 2007 2008 40 40
Slide 41: Cost to Income Ratio
Cost to Income Ratio 100 77 76 74 66 60 58 % 50 0 2003 2004 2005 2006 2007 2008 41 41
Slide 42: Shareholder Funds
Shareholder Funds 1,217 1,117 1200 900 R'm 564 600 473 384 426 300 0 2003 2004 2005 2006 2007 2008 42 42
Slide 43: Market Capitalisation
Market Capitalisation 4000 3500 3,195 3,031 3000 2500 2,233 2000 R'm 1500 1,072 1000 399 500 164 0 2003 2004 2005 2006 2007 2008 43 43
Slide 44: Total Assets
Total Assets 2,937 3000 2500 2,191 2000 1500 1,251 R'm 1000 805 512 434 500 0 2003 2004 2005 2006 2007 2008 44 44
Slide 45: Going Forward
Going Forward 45
Slide 46: Going forward
Going forward Investment • Distribution - +25 Branches - +75 Mobile Banks - +50 ATMs - +2 250 POS devices • Technology - Branch Streamlining Challenges • Cash-plastic • Economy • Competitors • Funding • Crime 46 46
Slide 47: Questions?
. | SS Thank You Questions ?
Capitec Bank Holdings — Non-Deal Roadshow (April 2008) on 6ix