Capitec Bank Holdings Limited · JSE:CPI

Capitec Bank — H1 2016 Earnings Presentation

41 slides from Capitec Bank's earnings presentation, Aug 31, 2015

  1. Slide 1: Interims Results 31 August 2015

    Interims Results 31 August 2015

  2. Slide 2: Content

    Content • Key indicators • What’s behind our growth • Liquidity • Capital • The way forward © 2015 Capitec Bank Interim Results 2

  3. Slide 3: Key indicators

    key Talellersive) a=

  4. Slide 4: Key Indicators: Headline earnings

    Key Indicators Headline earnings (R’millions) 3 000 2 547 2 500 2 017 2 000 1 584 1 469 1 500 1 173 1 078 971 1 000 640 500 437 302 212 - 2008 2009 2010 2011 2012 2013 Aug-13 2014 Aug-14 2015 Aug-15 © 2015 Capitec Bank Interim Results 4

  5. Slide 5: Key Indicators: Return on equity

    Key Indicators Return on equity (%) 40 35 34 32 30 29 27 27 26 25 25 25 23 23 22 20 15 10 5 0 2008 2009 2010 2011 2012 2013 Aug-13 2014 Aug-14 2015 Aug-15 © 2015 Capitec Bank Interim Results 5

  6. Slide 6: Key Indicators: Total assets

    Key Indicators Total assets (R’millions) 60 000 58 554 2 066 55 000 53 916 49 574 50 000 46 191 45 000 42 858 22 839 40 000 38 347 35 000 30 000 25 000 23 622 20 000 14 440 33 649 15 000 9 488 10 000 4 969 5 000 2 936 - 2008 2009 2010 2011 2012 2013 Aug-13 2014 Aug-14 2015 Aug-15 Loans and advances

  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 36 33 34 32 30 20 10 - 2008 2009 2010 2011 2012 2013 Aug-13 2014 Aug-14 2015 Aug-15 © 2015 Capitec Bank Interim 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 63 61 60 59 55 50 45 40 34 30 29 22 20 15 10 10 0 2008 2009 2010 2011 2012 2013 Aug-13 2014 Aug-14 2015 Aug-15 © 2015 Capitec Bank Interim 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 34 32 32 30 30 26 25 22 20 19 18 15 15 11 10 5 0 2008 2009 2010 2011 2012 2013 Aug-13 2014 Aug-14 2015 Aug-15 © 2015 Capitec Bank Interim Results 9

  10. Slide 10: What's behind our growth

    what’s behind our growth

  11. Slide 11: What's behind our growth

    What’s behind our growth • Client numbers • Transaction activity • Credit © 2015 Capitec Bank Interim Results 11

  12. Slide 12: Clients Numbers: Growth in active clients

    Clients Numbers Growth - active clients (‘000) 7 000 464 438 6 708 418 6 000 6 244 372 5 806 339 5 000 5 388 5 016 4 677 4 000 3 000 2 000 1 000 0 2008 2009 2010 2011 2012 2013 Aug-13 2014 Aug-14 2015 Aug-15 © 2015 Capitec Bank Interim Results 12

  13. Slide 13: Clients Numbers: Market conditions

    Clients Numbers Market conditions • Economy – price sensitivity • Higher income market acceptance • Convenience vs physical platform • Lack of transparency in the market © 2015 Capitec Bank Interim Results 13

  14. Slide 14: Clients Numbers: Our focus

    Clients Numbers Our focus • Value offer – simplified − R5 for all accounts − Lowest fixed fees per transaction − Highest savings return • Advertising, awareness equal to opposition, 90% + − Service focus / quality − Word of mouth − Client support − Awards: Ask Afrika; Sunday Times; Social Media © 20

  15. Slide 15: What's behind our growth: Transaction activity

    What’s behind our growth Transaction activity • Growth – in primary banking clients • Our focus © 2015 Capitec Bank Interim Results 15

  16. Slide 16: Transaction Activity: Growth in primary bank clients

    Transaction Activity Growth - primary bank clients (‘000) 3 500 3 023 3 000 2 761 2 447 2 500 2 183 2 000 1 945 1 766 1 500 1 120 1 000 832 553 500 392 220 - 2008 2009 2010 2011 2012 2013 Aug-13 2014 Aug-14 2015 Aug-15 © 2015 Capitec Bank Interim Results 16

  17. Slide 17: Transaction Activity: Growth in net transaction fee income

    Transaction Activity Growth - net transaction fee income - (R’millions) 3 000 2 608 2 500 2 000 1 927 1 500 1 414 1 349 1 202 1 000 899 836 532 500 295 160 89 0 2008 2009 2010 2011 2012 2013 Aug-13 2014 Aug-14 2015 Aug-15 © 2015 Capitec Bank Interim Results 17

  18. Slide 18: Transaction Activity: Average transactions per client per month

    Transaction Activity Average transactions per client per month Banking Clients Non-Banking Clients Aug-14 Aug-15 Aug-14 Aug-15 ATM 5.0 5.0 1.1 1.2 Branch 0.8 0.8 0.4 0.4 Debit Order 2.3 2.2 0.1 0.1 Internet 0.4 0.3 - - Remote App - 0.2 - - USSD 3.3 4.3 0.5 0.7 POS 5.4 6.0 0.9 1.0 System 14.1 15.3 2.

  19. Slide 19: Transaction Activity: Growth in distribution / access

    Transaction Activity Growth – distribution / access Changes – for 12 months Change Total since Aug-14 Aug-15 More branches 44 691 More ATMs - own and partnership ATMs 438 3 646 Cellphone clients (‘000) 869 3 791 Internet clients (‘000) (29) 282 © 2015 Capitec Bank Interim Results 19

  20. Slide 20: Transaction Activity: Our focus

    Transaction Activity Our focus • Conversions • Product take up • Online / Security • Direct communication – support client © 2015 Capitec Bank Interim Results 20

  21. Slide 21: What's behind our growth: Credit

    What’s behind our growth Credit • Industry • Sales focus • Model criteria • Collections • Provisions © 2015 Capitec Bank Interim Results 21

  22. Slide 22: Credit: Industry 2007 – 2015

    Credit Industry 2007 – 2015 • 2007 - Revised legislation • 2010 - Investment - World Cup • 2012 - Too much too quickly • Term extension • Value extension • Pull back • 2014 - Stabilisation • 2015 - New regulations © 2015 Capitec Bank Interim Results 22

  23. Slide 23: Credit: Focus

    Credit Focus • Continuous model adjustments • October 2014 model changes • Employer model • July 2015 adjustment © 2015 Capitec Bank Interim Results 23

  24. Slide 24: Credit: Value of new loans advanced

    Credit Sales Focus - Value of new loans advanced (R’millions) 30 000 25 401 25 000 20 000 19 393 19 417 18 214 15 000 14 318 11 070 10 000 9 501 9 346 8 645 6 273 5 162 5 000 - 2008 2009 2010 2011 2012 2013 Aug-13 2014 Aug-14 2015 Aug-15 © 2015 Capitec Bank Interim Results 24

  25. Slide 25: Credit: Sales focus

    Credit Sales focus • Economy − Mining − Support industries − Growth © 2015 Capitec Bank Interim Results 25

  26. Slide 26: Credit: Sales focus – shorter term

    Credit Sales focus – shorter term Loan sales – by product (%) 100% 9% 14% 28% 25% 31% 46% 75% 35% 36% 24% 24% 27% 50% 23% 24% 16% 24% 20% 30% 25% 11% 29% 32% 25% 26% 20% 21% 0% Feb-13 Aug-13 Feb-14 Aug-14 Feb-15 Aug-15 1 - 12 month 13 - 36 month 37 - 60 month 61 - 84 month © 2015 Capitec Bank Interi

  27. Slide 27: Credit: Client Profile – consumer credit health index

    Credit Client Profile – consumer credit health index 2015 TransUnion Report Interim Results 27

  28. Slide 28: Credit: Client Profile – Capitec client health

    Credit Client Profile – Capitec client health Clients with < 20% cash available after commitments Aug-13 Aug-14 Aug-15 Total % 13.7 9.6 6.5 Government % 15.4 10.5 5.4 Private sector % 10.7 8.4 7.9 © 2015 Capitec Bank Interim Results 28

  29. Slide 29: Credit: Model criteria

    Credit Model criteria Credit application (%) Aug-13 Aug-14 Aug-15 Applications Decline Rate 53 53 46 Application Approved: Not Taken up 15 15 16 Applications Taken Up Rate 32 32 38 Total 100 100 100 Re-stated © 2015 Capitec Bank Interim Results 29

  30. Slide 30: Credit: Collections / provisions

    Credit Collections / provisions Arrears & impairment provisions of gross loans & advances Aug-13 Aug-14 Aug-15 Gross loans & advances R'm 32 644 35 086 37 898 Loans past due (arrears) R'm 1 799 1 935 1 781 Arrears to gross loans and advances % 5.5 5.5 4.7 Arrears and arrears rescheduled < 6 months R

  31. Slide 31: Liquidity

    liquidity

  32. Slide 32: Consumer acceptance

    Consumer acceptance • Brand trust • Savings returns • Flexibility © 2015 Capitec Bank Interim Results 32

  33. Slide 33: Wholesale funding

    Wholesale funding • Successful bond issue • Continuous support © 2015 Capitec Bank Interim Results 33

  34. Slide 34: Liquidity: Deposits

    Liquidity Deposits (R’millions) 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 Aug-13 2014 Aug-14 2015 Aug-15 Retail call Retail fixed Wholesale © 2015 Capitec Bank Interim Results 34

  35. Slide 35: Capital

    capital

  36. Slide 36: Capital structure

    Capital structure • Well capitalised – capital adequacy at 35.4% • Shareholders mix © 2015 Capitec Bank Interim Results 36

  37. Slide 37: Dividend

    Dividend • 52% increase • Once off adjustment to increase interim relative to total dividend • Dividend cover to remain the same © 2015 Capitec Bank Interim Results 37

  38. Slide 38: The way forward

    the way forward

  39. Slide 39: The way forward: Logistics

    The way forward Logistics • Branch network • ATM expansion • Self help devices • Remote banking © 2015 Capitec Bank Interim Results 39

  40. Slide 40: The way forward: Business focus

    The way forward Business focus • Service quality • Primary bank clients • Credit • Efficiency © 2015 Capitec Bank Interim Results 40

  41. Slide 41: Thank you

    thank you © 2015 Capitec Bank Interim Results 41

Capitec Bank Holdings — H1 2016 Earnings Presentation on 6ix