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Quarterly Disclosure In Terms Of Regulation 43 Of The Regulations Relating To Banks
Capitec Bank Holdings Limited
Registration number: 1999/025903/06
Registered bank controlling company
Incorporated in the Republic of South Africa
JSE ordinary share code: CPI ISIN code: ZAE000035861
JSE preference share code: CPIP ISIN code: ZAE000083838
(“Capitec”)
QUARTERLY DISCLOSURE IN TERMS OF REGULATION 43 OF THE REGULATIONS RELATING
TO BANKS
Capitec and its subsidiaries (“the group”) have complied with Regulation 43
of the Regulations relating to banks, which incorporates the requirements of
Basel.
In terms of Pillar 3 of the Basel rules, the consolidated group is required
to disclose quantitative information on its capital adequacy, leverage and
liquidity ratios on a quarterly basis.
Capitec Bank Limited (“Capitec Bank”), the wholly-owned subsidiary of
Capitec, acquired 100% of the issued share capital of Mercantile Bank
Holdings Limited (“Mercantile Holdings”) on 7 November 2019, the date on
which the final purchase price was paid. On 12 November 2019, the assets and
liabilities of Mercantile Holdings were transferred to Capitec Bank.
Mercantile Bank Limited (“Mercantile”) is now the direct, wholly-owned
subsidiary of Capitec Bank. Mercantile Holdings is in the process of being
deregistered.
Mercantile is consolidated in the disclosures in respect of the 3rd and 4th
quarters of the 2020 financial year ended on 29 February 2020. Both Capitec
and Mercantile apply the standardised approach to calculate capital
adequacy.
The acquisition of Mercantile has a significant impact on Capitec’s capital
adequacy ratio, as Capitec’s qualifying capital is measured against the
combined risk weighted assets of Mercantile and Capitec.
The impact of the acquisition of Mercantile on the capital adequacy ratio of
Capitec was partly offset by an increase in appropriated profits and the
placement of excess funds in investments with lower risk weightings such as
South African National Treasury bills.
Both Capitec and Capitec Bank have maintained healthy buffers above the
minimum capital adequacy requirement.
The group’s consolidated capital and liquidity positions at the end of the
fourth quarter for the 29 February 2020 financial year end are set out
below:
4th Quarter 2020 3rd Quarter 2020
29 February 2020 30 November 2019
Capital Capital
Adequacy Adequacy
R’000 Ratio % R’000 Ratio %
COMMON EQUITY TIER 1
CAPITAL (CET1) 24 457 242 29.5 22 571 738 27.4
Additional Tier 1 capital
(AT1)(1) 51 794 0.1 73 351 0.1
TIER 1 CAPITAL (T1) 24 509 036 29.6 22 645 089 27.5
General allowance for
credit impairment 756 767 751 682
TIER 2 CAPITAL (T2) 756 767 0.9 751 682 0.9
TOTAL QUALIFYING REGULATORY
CAPITAL 25 265 803 30.5 23 396 771 28.4
REQUIRED REGULATORY
CAPITAL(2) 9 525 692 9 476 453
(1) Starting 2013, the non-loss absorbent AT1 and T2 capital is subject to a
10% per annum phase-out in terms of Basel 3.
(2) This value is 11.500% of risk-weighted assets, being the Basel global
minimum requirement of 8.000%, the South African country-specific buffer of
1.000% and the Capital Conservation Buffer of 2.500%, disclosable in terms of
a SARB November 2016 directive in order to standardise reporting across
banks. In terms of the regulations relating to banks the Individual Capital
Requirement (“ICR”) is excluded.
4th Quarter 2020 3rd Quarter 2020
29 February 2020 30 November 2019
R’000 R’000
LIQUIDITY COVERAGE RATIO (LCR)
High-Quality Liquid Assets(1) 32 989 868 32 586 019
Net Cash Outflows(2) 1 944 872 2 256 754
Actual LCR Ratio 1 696% 1 444%
Required LCR Ratio 100% 100%
(1) As at 29 February 2020, R1.15 billion of the total High-Quality Liquid
Assets is attributable to Mercantile.
(2) Both Capitec and Mercantile, on an individual basis, have a net cash inflow
after applying the run-off weightings, therefore outflows for the purpose of
the ratio are deemed to be 25% of gross outflows.
As at 29 February 2020, R550.7 million of the total net cash outflows is
attributable to Mercantile.
4th Quarter 2020 3rd Quarter 2020
29 February 2020 30 November 2019
R’000 R’000
NET STABLE FUNDING RATIO (“NSFR”)
Total Available Stable Funding(1) 121 040 963 120 529 155
Total Required Stable Funding(2) 61 883 875 60 491 939
Actual NSFR Ratio 195.6% 199.2%
Required NSFR Ratio 100% 100%
(1) Mercantile’s equity at acquisition eliminates against Capitec Bank’s
investment in the subsidiary. Assets and liabilities of Mercantile have been
aggregated in the disclosure above. As at 29 February 2020, R9.5 billion of the
Total Available Stable Funding is attributable to Mercantile.
(2) As at 29 February 2020, R7.9 billion of the Total Required Stable Funding
is attributable to Mercantile.
4th Quarter 2020 3rd Quarter 2020
29 February 2020 30 November 2019
R’000 R’000
LEVERAGE RATIO
Tier 1 Capital 24 509 036 22 645 089
Total Exposures(1) 135 012 009 136 377 222
Leverage Ratio 18.2% 16.6%
(1) As at 29 February 2020, R14.5 billion of the total exposures is attributable
to Mercantile.
For the detailed LCR, NSFR and leverage ratio calculations refer to the
“Banks Act Public Disclosure” section on our website at
www.capitecbank.co.za/investor-relations
By order of the Board
Stellenbosch
14 April 2020
Sponsor - PSG Capital Proprietary Limited
Date: 14-04-2020 07:06:00
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