Capitec Bank Holdings Limited · JSE:CPI
Capitec Bank — H1 2012 Earnings Presentation
53 slides from Capitec Bank's earnings presentation, 2012
Slide 1: Interim Results - 2012
Interim Results - 2012 eS) CAPITEC
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared and issued by and is the sole responsibility of Capitec Bank Holdings Limited (the "Company"). The presentation does not constitute, or form part of an offer to sell, or the solicitation of an offer to subscribe for or buy, any rights offer shares or le
Slide 3: Disclaimer
DISCLAIMER This presentation is not for distribution, directly or indirectly, in or into the United States, Australia, Canada, Japan and Hong Kong, subject to certain exceptions, and any other jurisdiction where the extension or making of the rights offer would be unlawful or in contravention of cer
Slide 4: Disclaimer
DISCLAIMER In member states of the European Economic Area ("EEA") which have implemented the Prospectus Directive (each, a "Relevant Member State"), this presentation and any offer if made subsequently is directed exclusively at persons who are "qualified investors" within the meaning of the Prospec
Slide 5: Disclaimer
DISCLAIMER No representation or warranty, express or implied, is made or given by or on behalf of the Company, Merrill Lynch International or Sanlam Capital Markets Limited (the “Joint Underwriters”) or any of their respective affiliates (within the meaning of Rule 405 under the Securities Act) (“Af
Slide 6: Disclaimer
DISCLAIMER The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to verification, completion and change without notice. Any decision to purchase rights offer shares should be made solely on the basis of information to be containe
Slide 7: Key Financials
Key Financials eS) CAPITEC
Slide 8: Key Financials: Headline earnings per share
Key Financials Headline earnings per share Cents 8
Slide 9: Key Financials: Headline earnings
Key Financials Headline earnings R’millions 9
Slide 10: Key Financials: Return on equity
Key Financials Return on equity Percentage 10
Slide 11: Key Financials: Shareholders' funds
Key Financials Shareholders’ funds R’millions 11
Slide 12: Key Financials: Total assets
Key Financials Total assets R’millions 4 969 2 936 805 1 251 434 512 12
Slide 13: Key Financials: Net transaction fee income
Key Financials Net transaction fee income R’millions 13
Slide 14: Key Financials: Cost to income ratio
Key Financials Cost to income ratio Percentage 14
Slide 15: Business Drivers
Business Drivers & CAPITEC BANK
Slide 16: Business Drivers: Number of active clients
Business Drivers Number of active clients ‘000 16
Slide 17: Business Drivers – Credit: Value of new loans advanced
Business Drivers – Credit Value of new loans advanced R’millions 17
Slide 18: Business Drivers – Credit: Number of loans advanced
Business Drivers – Credit Number of loans advanced ‘000 18
Slide 19: Business Drivers – Credit: Loan impairment expense
Business Drivers – Credit Loan impairment expense Change compared to six February August months ended 2012 2011 R’m R’m Book growth 300 495 Improvement in book quality (150) (80) Increased valuation of handed over book (34) (29) Increase in gross loan impairment expense 116 386 19
Slide 20: Business Drivers – Credit: Arrears to gross advances
Business Drivers – Credit Arrears to gross advances Percentage 20
Slide 21: Arrears and Impairment Provision of Gross loans and advances
Business Drivers – Credit Arrears and Impairment Provision of Gross loans and advances R’millions 21
Slide 22: Business Drivers – Liquidity: Retail savings deposits
Business Drivers – Liquidity Value of retail savings deposits R’millions 22
Slide 23: Business Drivers – Liquidity: Deposits
Business Drivers – Liquidity Deposits R’millions 23
Slide 24: Contractual Liquidity Mismatches
Business Drivers – Liquidity Contractual Liquidity Mismatches R1t 24 Source : Capitec Bank – Regulation 43 disclosure
Slide 25: Business Drivers – Liquidity: Mismatches
Business Drivers – Liquidity Mismatches 25 Source : Capitec Bank – Regulation 43 disclosure
Slide 26: Business Drivers: Changes Aug '12 vs Feb '12
Business Drivers Changes – Aug ‘12 vs Feb ‘12 More branches • 27 534 More ATMs Including own partnership ATMs • 292 2,368 More staff • 586 7,780 26
Slide 27: Growth Potential
Growth Potential eS) CAPITEC
Slide 28: Unsecured credit - A Bubble?
Growth Potential Unsecured credit - A Bubble ? Secured credit – the bubble burst • Inter dependency – price, resale, repayment • Domino effect Unsecured credit • Key influences • Job losses • Interest rate increases (fixed for contract) • Large scale over indebtedness 28
Slide 29: Quality – unsecured credit – Age analysis
Growth Potential Quality – unsecured credit – Age analysis Source : Macquarie Research 29
Slide 30: Quality – Total SA unsecured credit – % Current
Growth Potential Quality – Total SA unsecured credit – % Current Source : NCR
Slide 31: Quality – unsecured credit – % Impaired accounts
Growth Potential Quality – unsecured credit – % Impaired accounts Source : NCR
Slide 32: Quality – Capitec Bank - indebtedness own clients
Growth Potential Quality – Capitec Bank - indebtedness own clients
Slide 33: A restructured credit market
Growth Potential A restructured credit market • 2007 – Credit Act change • From R10k over 36 months • To R230k over 84 months • Mortgage bonds 2007 – 2011 (Q4) • Reduced: R53 billion to R29 billion disbursed • Secured credit 2007 – 2011 (Q4) • Static: R32 billion to R33 billion • Move from secured t
Slide 34: A restructured credit market – increasing high income sector
Growth Potential A restructured credit market– increasing high income sector – Q4 Unsecured Credit Granted by ‘Income Level’ - % Monthly Income 2008 2009 2010 2011 < R10 000 68 53 48 42 R10 000 – R15 000 15 21 21 21 >R15 000 17 26 31 37 Total 100 100 100 100 Source : NCR
Slide 35: A restructured credit market
Growth Potential A restructured credit market • Reduced cost of credit • Double the credit value – same monthly repayment • New higher salaried clients using unsecured credit • 1.3 million more credit clients – March 2010 to March 2011 • Credit need –bonded homes vs active credit clients Source : NC
Slide 36: Demand caused by growth in living standards
Growth Potential Demand caused by growth in living standards Growth ‘000 Housing 2002 – 2010 2,600 Electricity accounts 2007 – 2011 602 Vehicles 2007 – 2011 733 If the funding need is R50k per item – Total Credit Demand : R197 billion 36
Slide 37: Changing consumer profile
Growth Potential Changing consumer profile Percentage Population Change: 2001 - 2011 LSM 1 – 3 LSM 5 – 7 • 2001 - 40% • 2001 - 31% • 2011 - 14% • 2011 - 49% Source: AMPS
Slide 38: Working adults per income group
Growth Potential Working adults per income group (millions) Source : Macquarie Research 38
Slide 39: Share of market - Capitec Bank
Growth Potential Share of market- Capitec Bank Millions Market share (Client numbers) Total adult bank clients 21.2 Capitec salary deposit clients 1.5 7.1% Capitec fee income clients 1.9 9.0% Active savings clients 3.0 Capitec savings clients 0.6 20.0% Active credit clients 19.5 Capitec credit clien
Slide 40: Net transaction fee income
Growth Potential Net transaction fee income 40
Slide 41: Rights Issue
Rights Issue eS) CAPITEC
Slide 42: Salient features of Rights Issue
Salient features of Rights Issue (RI) • Amount – R2.25 billion • 7 rights per 50 shares • Current capital adequacy (CAR) is 38%
Slide 43: Salient dates of Rights Issue
Salient dates of Rights Issue 26 September 2012 Declaration on SENS 5 October 2012 Finalisation announcement on SENS 12 October 2012 Last day to trade in Capitec shares to participate in rights offer 15 October 2012 Letters of allocation available to shareholders to trade 22 October 2012 Rights offe
Slide 44: Why do a Rights Issue?
Why do a Rights Issue ? Conservative capital management strategy • Issue capital when you can, opposed to when you have to • Would have had to issue capital post the announcement of the results in 2013, if no rights issue now • Moving forward, it provides the bank with flexibility in executing its s
Slide 45: Reasons for Rights Issue?
Reasons for Rights Issue ? • To fund growth of: • Branches • Loan book • Uncertainty regarding Basel 3 implementation • The capital mix between Tier 1 and Tier 2 instruments is expected to change • Optimise the capital base
Slide 46: The Future
The Future eS) CAPITEC
Slide 47: The Future: Internal Focus
The Future Internal Focus Positioning, Product, Service – To be unique • Positioning • Advertising • Branches • Locations 47
Slide 48: Positioning – Branch layout
The Future Positioning – Branch layout Say it! Deposit & enquire one to one area 24 hour Waiting Welcome access area area
Slide 49: Positioning – Branch Look
The Future Positioning – Branch Look
Slide 50: Product enhancements
The Future Product enhancements Transaction Credit Savings Platform (Savings) Platform Account Debit Mastercard One Loan Credit Card Easy Access Mobile Internet POS Branch Mobile Branch Cell security Cell transactions Budget tool USSD Browser
Slide 51: Service Enhancements
The Future Service Enhancements • Centralised collections – service focus • Centralised control • New service front end • Options • Road map • Queuing system • Side by side service • Paperless • Cash recycling • Training • Efficiency 51
Slide 52: The Future – Capitec Bank: External influences
The Future – Capitec Bank External influences • Economic down turn • Regulatory environment • Industrial action • Competition 52
Slide 53: Thank you
Thank you Copyright© Capitec Bank 2009 An authorised financial services and credit provider. Capitec Bank Limited Reg. No.: 1980/003695/06 NCR Reg. No.: NCRCP13
Capitec Bank Holdings — H1 2012 Earnings Presentation on 6ix