Capitec Bank Holdings Limited · JSE:CPI
Capitec Bank — FY2014 Earnings Presentation
49 slides from Capitec Bank's earnings presentation, Mar 25, 2014
Slide 1: Results 2013 - 2014
3/25/2014 Results 2013 - 2014 1 1
Slide 2: Agenda
3/25/2014 • Market • Results Highlights • Business Drivers • Credit • Bank Transactions • Savings • Opportunities • Summary 2 2
Slide 3: Market: Clients with bank accounts
3/25/2014 Market Clients with bank accounts - millions 30 27.3 25 23.9 21 21.2 20 19.6 20 19 15 10 5 0 2007 2008 2009 2010 2011 2012 2013 Source Finscope 3 3
Slide 4: Market: Banked Clients
3/25/2014 Market Banked Clients Source Finscope 4 4
Slide 5: Market: Banked Clients - Internet Banking
3/25/2014 Market Banked Clients - Internet Banking Personal Income Source Finscope 5 5
Slide 6: Market: Banked Clients - Cellphone banking
3/25/2014 Market Banked Clients -Cellphone banking 6 6
Slide 7: Market: Credit - Total Market
3/25/2014 Market Credit - Total Market Credit Granted (Q3) (R’ ’billions) 2010 2011 2012 2013 Mortgages 26.3 30.3 28.8 34.5 Secured 25.2 30.8 35.2 39.9 Facilities 8.8 14.9 18.5 17.7 Unsecured & Short term 14.7 22.9 27.2 22.3 Other - - - 2.8 Total 75.0 98.9 109.7 117.2 % Applications Rejected 39.1 44
Slide 8: Market: Credit Granted - Key growth sectors
3/25/2014 Market Credit Granted - Key growth sectors - Q3 R’’millions 2010 2011 2012 2013 Mortgages <R 350K 3 080 3 092 2 559 2 421 >R 350k 23 260 27 186 26 205 32 101 Total 26 340 30 278 28 764 34 522 No of Mortgages 1 811 1 825 1 845 1 828 R’ ’millions 2010 2011 2012 2013 Facilities Cards (Credit,
Slide 9: Market: Credit - Unsecured by Loan Size
3/25/2014 Market Credit - Unsecured Credit Granted (Q3) (R’ ’billions) by Loan Size 2010 2011 2012 2013 <6m 0.1 0.3 0.4 0.6 7-12m 0.7 0.9 0.8 1.3 13 - 36m 5.7 8.5 7.4 5.9 36 - 60m 6.4 10.7 13.2 10.1 60m+ 0.4 0.8 4.1 3.0 Total 13.3 21.2 25.9 20.9 Source NCR 9 9
Slide 10: Market: Credit - Unsecured by Income Level
3/25/2014 Market Credit - Unsecured Credit Granted (Q3) (R’ ’billions) by Income Level 2010 % Total 2011 2012 2013 % Total <R10k 6.4 48% 9.2 10.5 6.9 33% R10k - R15k 2.9 22% 4.6 5.4 4.1 20% >R15k 4.0 30% 7.4 10.0 9.9 47% Total 13.3 100% 21.2 25.0 20.9 100% Source NCR 10 10
Slide 11: Market: Retail Deposits
3/25/2014 Market Retail Deposits Market Size - R’billions Source SARB 11 11
Slide 12: Results Highlights
3/25/2014 Results Highlights 12 12
Slide 13: Results: The Highlights
3/25/2014 Results The Highlights Key Indicators 2014 Change Headline Earnings R2.0b +27% Headline earnings per share 1 752 cents +15% Shareholders’ ’ funds R10.0b +17% Return on equity 23% -4 % points Active client 5.4m +15% Net transaction fee income R1.9b +43% Net transaction income to 59% +14% po
Slide 14: Headline Earnings (R'millions)
3/25/2014 Results Headline Earnings (R’millions) 2,017 2000 1,584 1500 1,078 1000 640 500 437 302 212 160 116 47 70 30 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 14 14
Slide 15: Headline Earnings per share (cents)
3/25/2014 Results Headline Earnings per share (cents) 15 15
Slide 16: Business Drivers
3/25/2014 Business Drivers 16 16
Slide 17: Credit
3/25/2014 Business Drivers Credit 17 17
Slide 18: Credit: Loans Advanced
3/25/2014 Business Drivers - Credit Loans Advanced R’millions 18 18
Slide 19: Credit: Sales
3/25/2014 Business Drivers - Credit Sales R’millions 19 19
Slide 20: Credit: Sales
3/25/2014 Business Drivers - Credit Sales R’millions 20 20
Slide 21: Credit Approval
3/25/2014 Business Drivers - Credit Credit Approval % of Applications 2013 2014 Total declined applications 54 56 Applications accepted - taken up 38 29 Applications accepted - not taken up 8 15 Total Applications 100 100 21 21
Slide 22: Arrears to gross advances
3/25/2014 Business Drivers - Credit Arrears to gross advances - % Percentage 22 22
Slide 23: Arrears and Provisions
3/25/2014 Business Drivers - Credit Arrears and Provisions 2010 2011 2012 2013 2014 Gross Loans & Advances R’m 5 607 10 916 18 408 30 658 33 690 Loans past due (arrears) R’m 350 626 932 1 777 2 174 Arrears to gross loans & % 6.2 5.7 5.1 5.8 6.5 advances Provision for doubtful R’m 382 845 1 545 2 723
Slide 24: Conservative Provisioning
3/25/2014 Business Drivers - Credit Conservative Provisioning - % of book provided February 2013 February 2014 Credit Status of Book Provided of Book Provided Up to date 94.1 6.4 93.6 7.4 1 Payment in arrears 3.8 34.2 3.7 46.4 2 Payments in arrears 1.4 68.9 1.6 74.3 3 Payments in arrears 0.7 87.0 1.
Slide 25: Market Challenges
3/25/2014 Business Drivers - Credit Market Challenges • Market • Economy • Non performing • Regulatory • Legislation • Control 25 25
Slide 26: Bank Transacting
3/25/2014 Business Drivers Bank Transacting 26 26
Slide 27: Number of active clients
3/25/2014 Business Drivers – Bank Transacting Number of active clients ‘000 27 27
Slide 28: Number of Primary Bank Clients
3/25/2014 Business Drivers – Bank Transacting Number of Primary Bank Clients ‘000 2,500 2183 2,000 1766 1,500 1220 1,000 832 553 500 392 0 2009 2010 2011 2012 2013 2014 28 28
Slide 29: Transaction Fees and Operating Expenses
3/25/2014 Business Drivers – Bank Transacting Transaction Fees and Operating Expenses R’millions 59% 45% 34% 29% 22% 15% 12% 3% 7% 1% 29 29
Slide 30: Number of Active Clients - Internet
3/25/2014 Business Drivers – Bank Transacting Number of Active Clients - Internet ‘000 400 356 350 300 261 250 200 150 137 100 55 50 24 8 0 2009 2010 2011 2012 2013 2014 30 30
Slide 31: Number of active clients - Mobile
3/25/2014 Business Drivers – Bank Transacting Number of active clients - Mobile Millions 31 31
Slide 32: Banking Income
3/25/2014 Business Drivers – Bank Transacting Banking Income • Client growth • Higher income clients • Electronic channels • Interchange 32 32
Slide 33: Savings
3/25/2014 Business Drivers Savings 33 33
Slide 34: Number of Savings Plan Clients
3/25/2014 Business Drivers - Savings Number of Savings Plan Clients ‘000 1200 1124 1000 800 760 600 425 400 261 200 151 76 0 2009 2010 2011 2012 2013 2014 34 34
Slide 35: Savings and Deposits
3/25/2014 Business Drivers - Savings Savings and Deposits R’millions 16 000 14 000 +41% 12 000 +0% 10 000 8 000 +31% 6 000 4 000 2 000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Retail call Retail fixed Wholesale 35 35
Slide 36: Opportunities
3/25/2014 Opportunities 36 36
Slide 37: Market Share: Credit
3/25/2014 Opportunities Market Share : Credit Book R’ ’m 2013 Granted R’ ’m 2013 Q3 Q3 Mortgages 809 893 34 522 Secure Credit 311 369 39 912 Credit Facilities 179 903 17 720 Unsecured Long Term 167 405 20 897 Unsecured Short Term 817 1 394 Other 23 960 2 768 1 493 347 117 213 Market Share Total Mark
Slide 38: Potential market: Credit Granted
3/25/2014 Opportunities Potential market : Credit Granted Segment R’ ’millions Mortgages < R350 000 2 421 Credit Facilities: • Credit Card 8 361 • Bank Overdraft 3 614 • Store Cards 3 274 Vehicles - 70% of market 24 624 Furniture market 1 397 Unsecured Long Term/& Short 22 291 Term Total 65 982 Mark
Slide 39: Transacting - Primary bank market share
3/25/2014 Opportunities Transacting - Primary bank market share Main Bank Account ABSA FNB Standard Nedbank Capitec 2010 37.9 25.3 24.5 10.5 5.4 2011 35.9 25.6 23.3 11.0 6.7 2012 34.3 25.6 23.4 10.9 9.1 2013 30.5 25.1 24.9 10.7 12.7 Source AMPS 39 39
Slide 40: Retail deposits: market share
3/25/2014 Opportunities Retail deposits : market share Bank Dec 2012 Dec 2013 R’b Market R’b Market Share Share ABSA 128.8 26.4% 136.1 25.2% Standard 102.6 21.0% 114.9 21.3% FNB 101.7 20.8% 114.3 21.2% Nedbank 99.9 20.4% 106.8 19.8% Investec 24.2 4.9% 25.3 4.7% Capitec Bank 16.1 3.3% 21.8 4.0% Other
Slide 41: Opportunities: Client profile
3/25/2014 Opportunities • Client profile • Urban • Young 20 - 35 • Higher income • More electronic transacting • Reduce cash transacting 41 41
Slide 42: Unique positioning - Communication
3/25/2014 Opportunities Unique positioning - Communication Ask Why Campaign • New Accounts • Additional primary bank clients • Increased transacting 42 42
Slide 43: Unique positioning - Distribution
3/25/2014 Opportunities Unique positioning - Distribution 2014 2015 New platform branches 139 194 Mall placed branches 173 218 ATMs - Own & Branded 1 295 1 825 POS Platform 24 329 32 000 43 43
Slide 44: Unique Offer - Product
3/25/2014 Opportunities Unique Offer - Product • Focus - Electronic channels • One loan structure • Price and term • Revised on-line security 44 44
Slide 45: Unique Offer - Price
3/25/2014 Opportunities Unique Offer - Price • Retain price leadership on transaction fees • Monthly fee R5 • Card purchase fee Zero • Cash at tills R1.05 • Debit order R3.20 • Cash at ATMs - Own R4.60 • Price leadership on credit • Interest rates : 22% - 32% • No credit life or retrenchment fee • C
Slide 46: Unique Service Experience - Processes
3/25/2014 Opportunities Unique Service Experience - Processes • Queue system • ‘Side-by-side’ consulting • Central collections / verification • Service flow - system driven 46 46
Slide 47: Unique Service Experience - People
3/25/2014 Opportunities Unique Service Experience - People Training focus 13 000 Service training 6 823 Net new appointments 762 Promoted Internally 925 Incentivise on service focus 47 47
Slide 48: Summary
3/25/2014 Summary • Growing brand acceptance • Market share - growth potential • Capital adequacy • Conservative provisioning • Low cost / efficiency focus 48 48
Slide 49: Thank you
3/25/2014 Thank you 49 49