Capitec Bank Holdings Limited · JSE:CPI
Capitec Bank — FY2024 Earnings Presentation
38 slides from Capitec Bank's earnings presentation, February 2024
Slide 1: Capitec Bank Financial results February 2024
Capitec Bank Financial results February 2024
Slide 2: Questions can be sent to Investor Relations
Please send any questions to [email protected] Questions will be answered at the end of the presentation.
Slide 3: Evolved into a diversified financial services group
Evolved into a diversified financial services group Driven by continued investment for future growth Retail Banking R6.3 billion invested over the past 3 years R7.0 billion (+17%) Re-platformed our IT systems for stability, agility and scale Profit after tax Migrated data platform and systems to AWS
Slide 4: Capitec Group - Consolidated income statement
Capitec Group - Consolidated income statement Double-digit growth in headline earnings attributable to the diversification of our income streams YoY H2 vs H1 Feb 24 Feb 23 H2 2024 H1 2024 R’ million Change Change Net interest income 16 464 14 206 16% 8 446 8 018 5% Credit impairment charge (8 725) (
Slide 5: Capitec Group - Key performance indicators
Capitec Group - Key performance indicators Diversified income, robust balance sheet growth and strong capital position maintained Feb 24 Feb 23 Feb 22 Profitability: Net non-interest income to income from operations after credit impairments (%) 72 66 61 Cost-to-income (%) 39 40 47 Return on equity (
Slide 6: Retail bank
Retail bank SA’s leading digital and personal bank
Slide 7: Client profile change over the past 3 years
Client profile change over the past 3 years More affluent clients that do more digital transactions Key shifts in client profile Top online retailers • 6 million clients acquired • Top online shopping: Shein and Takealot • Clients with inflows >R15 000 increased 61% to 2.9 million • Top delivery: Ch
Slide 8: Active clients increased by 10% to 22 million in FY2024
Active clients increased by 10% to 22 million in FY2024 Clients with inflows over R15 000 grew by 17% to 2.9 million Active app clients Funeral plan clients 11.2 million (up 19%) 2.7 million (up 23%) Fully banked VAS clients 7.8 million (up 13%) 9.8 million (up 17%) Savings clients Capitec Pay clien
Slide 9: Leader in personal service and digital banking
Leader in personal service and digital banking 83% of all financial transactions are now cashless Personal Service Digital Banking Branch service Client engagement • Total branches: 846 (+2%) • Over 40 million messages per month on App, • One-on-one consultations: 38.7 million (-12%) WhatsApp, SMS a
Slide 10: SA's biggest banking app
SA’s biggest banking app 28% of South Africans over the age of 18 bank on our app every month Why clients love it • Most popular banking app in SA • Single app for personal and business banking • Open an account for free in minutes with just a selfie • Over 70 features that clients need the most • I
Slide 11: New digital products drove income growth
New digital products drove income growth Net income from digital products grew 90% to R2.9 billion, whilst volumes increased by 30% 1 400 New products launched in FY2024 New products 1 243 generated an additional R1 billion in • Vouchers net transaction income 1 154 • Bill payments 1 100 Capitec Pay
Slide 12: Credit
Credit Economy Our response Results Diversification
Slide 13: Economy - Pressure on wallets easing
Economy - Pressure on wallets easing Client cashflow strain statistics shows improvement over the last six months 14.1% 10.7% 9.8% 10.2% 9.8% Looking ahead: • Higher petrol price maintained 8.6% 8.3% 8.3% • Rand depreciating against major 7.3% 7.6% foreign currencies 7.3% 8.2% 6.8% • Middle East unc
Slide 14: Economy - Mixed employment stability
Economy - Mixed employment stability Retrenchments remain lower than pre-Covid, with strain in mining industry increasing 1,800 1 675 1,600 1,400 1,200 1 152 1,000 1 032 873 Looking ahead: 765 800 925 • Improving port congestion 705 • Improving electricity production 600 643 452 400 332 268 200 249
Slide 15: Economy - Quarterly unsecured credit sales
Economy - Quarterly unsecured credit sales Agile credit decisioning, staying ahead of the curve 50 45 43.1 15 41.1 41.1 40.4 40 12.4 13 Unsecured market excluding Capitec 10.9 cut back 9% year on year (Q3) 35 33.4 11 9.3 30 9 Capitec cut back 32% year on year (Q4) 7.4 25 6.8 • Stricter affordability
Slide 16: Our Response - Financial Education
Our Response - Financial Education Digital education platforms deliver learning experiences to 730 000 people 600 000 +35% 500 000 • Live Better Academy online platform and award winning MoneyUp Chat on WhatsApp 400 000 Registered users • Better debt management, 300 000 savings planning, budgeting a
Slide 17: Our Response - Credit education and treatments
Our Response – Credit education and treatments Debt review market share reduces from 8.6% to 7.6% 90.0 10.0% 9.0% 8.8% 8.6% 80.0 9.7% 8.5% 8.2% 9.0% 7.6% • 8.0% Debt Review Education campaign 70.0 across all media channels Balances under debt review (R’ billion) 7.0% 60.0 • Pre-delinquency campaigns
Slide 18: Result - Expected credit loss coverage ratio increased to 25.5%
Result - Expected credit loss coverage ratio increased to 25.5% Credit loss ratio (CLR) - decreased from 11.0% in Aug 23 to 9.2% at the end of the year 110.0 26.9% 25.5% 24.9% 23.6% 25.0% 23.5% 22.9% 90.0 20.5% 82.3 83.8 83.8 77.9 ECL increased due to older tranches 20.0% 71.2 18.5 22.3 maturing and
Slide 19: Diversification - Products
Diversification – Products Increased sales of credit card to higher income clients grew market share by 35% +57% over 2 years 18 000 16 000 Loan sales and disbursements (R' million) 14 000 12 000 10 000 8 000 +56% over 2 years 6 000 4 000 2 000 - Clients earning >R50k Credit Card Feb 22 Feb 23 Feb 2
Slide 20: Diversification - Channels
Diversification – Channels Greater efficiency through direct lending and self-service on the app +59% over 2 years 4 000 3 500 Loan sales and disbursements (R’ million) 3 000 2 500 2 000 1 500 1 000 +173% 500 - Direct App Feb 22 Feb 23 Feb 24 20
Slide 21: Diversification - New markets
Diversification – New markets Credit solutions designed for specific purposes and multiple income source clients +93% • Vehicle Finance: 8 additional 1 000 WeBuyCars branches opened in FY24 Loan sales and disbursements (R’ million) 800 • Education: 330+ Tertiary institutions 25000+ Schools 600 +395%
Slide 22: Insurance
Insurance More cover for less with our funeral plan and credit life insurance
Slide 23: Insurance
Insurance Total profit after tax increased by 12% to R3.1 billion (Feb 23: R2.7 billion) Credit Life • Average sum assured increased by 3% to R75.2 billion • More than 550 000 policies issued on our own license Funeral Plan • Active policies grew 23% to 2.7 million • 12.1 million South African lives
Slide 24: Business bank
Business bank Digitally-led, relationship-based banking accessible to all businesses in SA
Slide 25: Business bank value proposition
Business bank value proposition Simplified business banking for all based on our founding fundamentals A single solution for all businesses – no discrimination • Rebranded Mercantile Bank to Capitec Business • Open an account online in minutes with no paperwork • New app and online banking • Relatio
Slide 26: Financial results
Financial results Net profit after tax grew by 23% to R478 million (Feb 2023: R388 million) Investment since acquisition whilst growing profit • Acquired for R3.6 billion in Nov 19 and made material investments in systems and resources • Profit growth from R249 million pre-acquisition to R478 millio
Slide 27: Innovation led banking
Innovation led banking New technology enabled better products and lower pricing in FY2025 NEW digital merchant commerce • New card machines • Open account and order online with free delivery • Free daily settlements • Lower commission rates • Loan-based on turnover NEW banking fees are 50% less than
Slide 28: Group operating expenses
Group operating expenses Investing for the future
Slide 29: Total expenses increased by 17% to R13.9 billion
Total expenses increased by 17% to R13.9 billion Average annual increase of 14% over the past 5 financial years Key drivers of expense growth • Building, rebranding and scaling of Capitec Business • Building of new insurance business • Rebuilding of IT platforms and systems • Migration of data and s
Slide 30: Social Impact
Social Impact Making a difference for our people, communities and environment
Slide 31: Social Impact
Social Impact More than R100 million invested in financial education and community initiatives Environment • Carbon footprint decreased by 3% from prior year • Saved 15 491 trees through paperless branches in the past year Social • More than 10 700 individuals reached through the Capitec Foundation
Slide 32: People and Culture
People and Culture This remains a key ingredient of our success
Slide 33: People and culture
People and culture Creating focus, clarity and energy in our teams ensures we deliver against our purpose Leadership • Leadership Academy programs to create depth and bench strength Talent Development • 58% of new appointments from internal candidates • Internal mobility program develops talent from
Slide 34: The future
The future Create value beyond banking
Slide 35: Key strategic decisions for future growth
Key strategic decisions for future growth Short-term impact on profitability gears the group for long-term growth Key decisions with a financial impact in FY2025 • Alignment of cash withdrawal fees for Capitec and non-Capitec devices • Lower payment fees on PayShap and immediate payments (RTC) • Ali
Slide 36: Avafin Holdings Limited
Avafin Holdings Limited One of the leading digital lenders in Europe and Mexico Business overview • A leading online lender • Operates in 5 countries with over 360 employees • Key financial performance indicators: - Gross loans and advances: EUR44.5 million - Net profit: EUR8.3 million Acquisition o
Slide 37: Our strategy starts with client needs and is built on culture
Our strategy starts with client needs and is built on culture Enabled through people, technology and data and guided by our culture Insure Credit life Funeral Plan Life Insurance Personal Banking Business Banking 22 million Full-service banking for all Leading digital bank clients and Single solutio
Slide 38: Thank you
Thank you Please send any questions to [email protected]