Wrap Text
REVIEWED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2012
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
REVIEWED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2012
· Headline earnings per share up 35% to 702 cents
· Earnings up 43%
· Interim dividend per share up 35% to 169 cents
· Return on equity 28%
· Active clients 4.2 million
· Rights issue announced
Six Six Six Year
months months months ended
ended ended August
August August 2012/ February
2012 2011 2011 2012
PROFITABILITY
Interest on loans Rm 3 035 1 940 56 4 347
Net loan fee income Rm 631 724 (13) 1 471
Net transaction fee
income Rm 583 361 61 836
Interest paid Rm (726) (451) 61 (1 022)
Other banking income Rm 3 7 (60) 14
Income from banking
operations Rm 3 526 2 581 37 5 646
Net loan impairment
expense Rm (1 019) (679) 50 (1 604)
Banking operating
expenses Rm (1 485) (1 183) 26 (2 486)
Non-banking operations Rm 4 - 3
Tax Rm (316) (221) 43 (464)
Preference dividend Rm (11) (10) 10 (19)
Earnings attributable to
ordinary shareholders
· Basic Rm 700 488 43 1 075
· Headline Rm 700 489 43 1 078
Cost-to-income ratio -
banking activities % 42 46 44
Return on ordinary
shareholders' equity % 28 29 29
Earnings per share
· Attributable Cents 702 518 35 1 122
· Headline Cents 702 520 35 1 125
· Diluted attributable Cents 691 505 37 1 096
· Diluted headline Cents 691 507 36 1 099
Dividends per share
· Interim Cents 169 125 35 125
· Final Cents 300
· Total Cents 425
Dividend cover X 4.2 4.2 2.6
ASSETS
Net loans and advances Rm 22 823 13 393 70 16 863
Cash and cash
equivalents Rm 7 097 3 248 119 4 551
Investments Rm 924 908 2 1 199
Other Rm 1 197 676 77 1 009
Total assets Rm 32 041 18 225 76 23 622
LIABILITIES
Deposits Rm 25 608 13 678 87 17 692
Other Rm 803 721 11 744
Total liabilities Rm 26 411 14 399 83 18 436
EQUITY
Shareholders' funds Rm 5 630 3 826 47 5 185
Capital adequacy ratio % 38 35 39
Net asset value per
ordinary share Cents 5 351 3 772 42 4 962
Share price Cents 20 222 18 845 7 18 500
Market capitalisation Rm 20 295 17 819 14 18 367
Number of shares in
issue '000 100 363 94 554 6 99 282
Share options
· Number outstanding '000 2 269 3 233 (30) 3 087
· Number outstanding to
shares in issue % 2 3 3
· Average strike price Cents 6 187 4 283 44 4 358
· Average time to
maturity Months 20 21 16
OPERATIONS
Branches 534 474 13 507
Employees 7 780 6 351 23 7 194
Active clients '000 4 252 3 247 31 3 706
ATMs
· Own 581 507 15 550
· Partnership 1 787 1 356 32 1 526
· Total 2 368 1 863 27 2 076
Capital expenditure Rm 296 203 46 381
SALES
Loans
Value of loans advanced Rm 12 831 9 226 39 19 393
Number of loans
advanced '000 1 934 2 355 (18) 4 648
Average loan amount R 6 634 3 918 69 4 172
Repayments Rm 9 065 7 566 20 16 173
Gross loans and
advances Rm 24 697 14 495 70 18 408
Loans past due (arrears) Rm 1 075 649 66 932
Arrears to gross
loans and advances % 4.4 4.5 5.1
Provision for doubtful
debts Rm 1 873 1 102 70 1 545
Provision for
doubtful debts to
gross loans and advances % 7.6 7.6 8.4
Arrears coverage ratio % 174 170 166
Loan revenue Rm 3 552 2 596 37 5 660
Loan revenue to average
gross loans and advances % 16.5 20.4 38.6
Gross loan impairment
expense Rm 1 141 755 51 1 780
Recoveries Rm 122 76 61 176
Net loan impairment
expense Rm 1 019 679 50 1 604
Net loan impairment
expense to loan revenue % 28.7 26.2 28.3
Net loan impairment
expense to average gross
loans and advances % 4.7 5.3 10.9
Deposits
Wholesale deposits Rm 10 753 5 454 97 7 162
Retail call savings Rm 8 864 4 963 79 6 348
Retail fixed savings Rm 5 646 3 125 81 4 015
CLIENTS
Active client base grew to 4.2 million
Capitec saw the active client base grow consistently during the past six months to reach
4.2 million at the end of August 2012. This reflects an increase of 31% and equates to
more than 90 000 new clients per month on average.
Active transacting and savings clients are in excess of 3.1 million. Lending only
clients total 1.1 million, comprising only 26% of total active clients.
The focus remains on acquiring clients that will use Capitec as their primary bank. Many
clients have accounts at a number of banks but choose one as the account into which
their salaries are deposited and from which payments are made.
EARNINGS
Increases in loan revenue to R3.6 billion and net transaction fee income to R583 million,
along with an improvement in the cost to income ratio to 42%, resulted in earnings of
R700 million, a 43% year-on-year increase.
The bank's focus has been to acquire more transacting clients, reduce the cost of credit
and maintain stringent credit criteria.
TRANSACTION INCOME
Net transaction fee income up 61% to R583 million
Gross transaction fee income (non-lending) grew by 55% compared to the six months ended
August 2011 and totalled R918 million. The growth in fee income exceeded the 31% growth
in client numbers for the same period.
Capitec delivered on its commitment to transparency and simplicity by charging a single
monthly administration fee of R4.50 for its Global One accounts and by simplifying
transaction prices. All transaction prices are quoted in the form of a fixed fee per
transaction.
Capitec promotes the use of mobile banking and at the end of August 2012 in excess of
2.0 million clients were registered for this service. The added convenience of mobile
transacting in the form of prepaid vouchers for electricity and cell phone airtime was
well supported and led to the doubling of income from electronic vouchers for the six
months since February 2012.
Net transaction fee income covered 39% of banking operating expenses compared to 31% in
the six months ended August 2011. The target for the full 2013 financial year is 40%.
LENDING INCOME
Loans advanced increased by 39% year-on-year to R12.8 billion
During the six months ended August 2012 Capitec took credit beyond traditional personal
loans by changing its offer to a single loan with a term of anywhere between one and
84 months and a maximum amount of R230 000. Clients can now choose their own credit
plan based on their credit profile and affordability, instead of being bound by
predetermined loan terms.
The offer of loans up to 84 months closes the gap between Capitec and the traditional
banks in terms of the maximum unsecured loan amount offered. The lower pricing of the
new loan product is a further step in Capitec's strategy to reduce the cost of credit in
the unsecured lending market.
Before the introduction of the new loan product a client would identify the need for
credit, for example, to build a house or purchase durable goods, and would be granted a
loan. When the client identified another need for credit a few months later, a second
loan would be granted based on affordability. Under these circumstances the client would
pay an origination fee and a monthly administration fee for each of the loans.
The new loan product reduces the cost to the client because additional credit
requirements are met by increasing the value of the client's existing loan. The client
does not pay an additional origination fee and will only pay one monthly administration
fee. The payment collections from the client's bank account are also reduced to a single
collection, increasing the client's ability to manage his finances.
The impact of the new loan product is reflected in the 18% decrease in the number of
loans advanced and the 69% increase in the average loan amount advanced compared to the
six months ended August 2011.
The 69% year-on-year growth in the sales of loans with terms longer than 12 months was
largely attributable to the new loan product. Loans with terms longer than 12 months
contributed 80% of sales compared to 66% for the six months ended August 2011.
The new loan product also attracted a significant number of new clients to Capitec.
Loans advanced to new clients increased by 64% compared to the six months ended
31 August 2011.
Capitec's credit granting criteria are constantly assessed and adjusted to ensure that
risk appetite is not exceeded. The risk parameters in the credit models are measured
against the actual performance of loans and credit bureau information is utilised in the
models to identify stresses in the market.
The continued growth in the unsecured lending market should be considered against the
background of the restructuring of the market that occurred with the introduction of the
National Credit Act (NCA) in 2007. The NCA restricts the interest rates and fees that
may be charged on unsecured loans. The resulting reduction in the cost of credit makes
unsecured credit available to a wider market. Higher income clients, with monthly income
in excess of R15 000, have progressively accounted for an increased portion of unsecured
credit granted. These clients carry a lower risk. Our analysis also indicates that
increased affordability, together with growth in disposable income has meant that the
growth in unsecured lending has not resulted in borrowers becoming over-indebted.
Arrears as a percentage of gross loans and advances down to 4.4%
The 70% year-on-year growth in the gross loan book from R14.5 billion to R24.7 billion
was achieved while maintaining the quality of the book. Book quality is measured most
objectively by loans past due (those in arrears) as a percentage of the total loan book
as well as the rand amount of arrears.
Arrears as a percentage of gross loans and advances improved to 4.4% compared to 4.5% in
August 2011 and 5.1% in February 2012. Loans past due increased to R1.1 billion compared
to R649 million at the end of August 2011 and R932 million at the end of February 2012,
a lower rate of increase than the gross loan book.
The provision for doubtful debts as a percentage of the gross loan book is 7.6%,
unchanged year-on-year and down from 8.4% at the end of February 2012. The decrease
compared to February 2012 is in line with the relative decrease in arrears and the
cyclical nature of the loan book. The provision as a percentage of arrears is 174%,
which signifies prudent provisioning.
Although loan book growth was predominantly in longer-term loans, these loans are
granted to lower risk clients. Loans with terms longer than 12 months now comprise 98%
of the loan book compared to 95% at the end of August 2011.
Net loan impairment expense down to 4.7% of average gross loans and advances
The net loan impairment expense as a percentage of average loans and advances decreased
to 4.7% from 5.3% for the six months ended August 2011 and 5.6% for the six months ended
February 2012.
The net loan impairment expense grew by 50% year-on-year and amounted to R1.0 billion.
The net expense includes recoveries of R122 million which increased by 61% year-on-year.
The growth in the expense was lower than the growth in the loan book and was positively
influenced by the arrears performance.
Our policy is to write off a client's full outstanding loan balance if any payment is in
arrears for more than 90 days.
The gross loan book grew by R10.2 billion during the six months ended August 2012.
During the same period the gross loan impairment expense (before recoveries) grew year-
on-year by R386 million to R1.1 billion from R755 million and by R116 million compared
to the six months ended February 2012. The table below analyses these increases:
February August
Change compared to the six 2012 2011
months ended Rm Rm
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
The continued growth in the longer-term loan book and the lengthening of the maximum
loan term affected the impairment expense. The provision for loans with terms longer
than 60 months is calculated by stretching the historical data that is available on
loans with shorter terms. Uncertainty surrounding new longer-term loans is greater at
the beginning of the term and the fact that the past does not necessarily reflect future
economic conditions must also be considered. For this reason the provisioning curve at
the beginning of the life span of a loan product is steepened by increasing the IAS39
provision on loans with terms of 12 months and longer.
Loan revenue up by 37% year-on-year to R3.6 billion
The launch of the new loan product resulted in a change in the make-up of the all in
yield.
The reduction in the number of loans advanced together with the increase in average loan
amounts meant that income from origination fees, which is capped on higher-value loans,
decreased by 9% compared to the six months ended 31 August 2011. The income from monthly
administration fees was also affected by the reduction in the number of loans advanced
and grew only nominally. Total loan fee income decreased by 5% year-on-year and by 7%
compared to the six months ended February 2012 to R782 million.
The introduction of the new loan product resulted in a diversification of interest rates
based on the clients profile and the increased options regarding the term of the loan.
Interest income increased by 56% year-on-year to R3.0 billion compared to R1.9 billion
for the six months ended August 2011 and R2.4 billion for the six months ended February
2012.
The credit life and retrenchment insurance cost borne by the bank for the benefit of its
clients increased to R151 million compared to R96 million for the six months ended
August 2011 due to the growth in the gross loan book. We do not charge our clients any
fee for this cover.
COST STRUCTURE
Cost to income ratio down to 42%
The cost-to-income ratio of banking activities improved to 42% from 46% for the six
months ended August 2011 and remained unchanged from the six months ended February 2012.
Capitec is in an expansion phase and the cost-to-income ratio was therefore not expected
to decrease significantly during the current financial year.
The bank's footprint was expanded by opening 27 new branches during the six months ended
August with another 28 new branches planned for the remainder of the financial year.
Capital expenditure increased by 46% year-on-year to R296 million.
Banking operating expenses grew by 26% compared to the six months ended August 2011 and
totalled R1.5 billion. This represents an increase of R302 million.
Employment, premises, information technology, cash-handling and marketing costs remain
the major components of operating expenditure.
The contribution of employment costs to total banking operating expenditure increased by
1% year-on-year to 54%. Employment costs contributed R158 million to the year-on-year
increase in operating expenditure.
Capitec employed 7 780 people as at the end of August 2012 compared to 6 351 at the
end of August 2011 and 7 194 at the end of February 2012.
There have been no changes to the incentive schemes since August 2009. Share
appreciation rights are cash-settled and the expense fluctuates according to the Capitec
share price. Share options are equity-settled and the income statement expense is
therefore not subject to share price fluctuations. The senior management performance
scheme and the staff performance bonus scheme are based on growth in headline earnings
per share. In total, incentive schemes contributed R160 million to employment costs
compared to R159 million for the six months ended August 2011 and R123 million for the
six months ended February 2012.
FUNDING AND LIQUIDITY
Total funding grew to R25.3 billion
Retail call savings grew by 79% year-on-year to R8.9 billion. Growth resulted from
increased client numbers and an increase in the average savings balance per client.
Retail fixed savings grew by 81% year-on-year, totalled R5.6 billion at the end of
August 2012 and comprised 34% of total term funding compared to 36% at the end of August
2011 against a target of 40%. The ratio will fluctuate based on the timing of wholesale
funding issuances. Fixed deposit rates remained competitive and the number of fixed
deposit accounts grew by 23% during the last year.
Retail funding comprises 57% of total funding compared to a target of 60%. Retail
funding remains an attractive source of funding because it currently costs on average
4% less than wholesale funding and diversifies funding sources.
Wholesale deposits increased by 97% year-on-year to R10.8 billion and by R3.6 billion
subsequent to February 2012. The increase was principally due to the issuance of
R3.0 billion in listed and unlisted subordinated and senior debt. The issuances of listed
debt were oversubscribed, indicating the funding market's confidence in Capitec. Senior
listed bonds in the amount of R322 million were repaid in May 2012.
The funding strategy remains to match the duration of assets and liabilities. This is a
powerful statement.
Liquidity management remains conservative
The management of liquidity continues to take preference over the optimisation of
profitability. Capitec complied with the two new Basel 3 liquidity ratios: the liquidity
coverage ratio and the net stable funding ratio.
Capitec's internal liquidity measurements and policies are more conservative regarding
the utilisation of retail call savings than the abovementioned prescribed measurements.
This means that funding in excess of operational requirements is held. These funds are
invested in interest-bearing instruments.
CAPITAL
Return on equity at 28%
The return on ordinary shareholders' equity remains above target and in line with the
return of 29% for the 2012 financial year.
The risk-weighted capital adequacy ratio is 38%. The R1.3 billion in subordinated debt
issued during the six months ended August 2012 increased the capital adequacy ratio at
the end of the six months by 6% from 32% to 38%. We continuously monitor capital
requirements and review the need for additional capital.
The disclosure in terms of Regulation 43 of the Banks' Act is available on the Capitec
Bank website.
RIGHTS ISSUE
An announcement regarding a rights offer on ordinary shares will follow immediately
hereafter in a separate announcement.
The R2.25 billion in proceeds from the rights issue will be utilised to fund growth in
the loan book as well as expansion of the branch network by between 50 and 75 branches
per year for the next 3 years.
THE FUTURE
The success of Capitec is driven by the bank's clients. We will continue to improve our
unique service, positioning and product offer for the benefit of our clients.
Opportunities exist to broaden our market to include higher income clients that are
increasingly exposed to our simplified, low-cost offer and are finding that the Global
One solution is perfect for their needs.
The expansion of the branch network will continue to provide improved market penetration
and more branches in shopping malls will assist in the acquisition of a different client
profile.
INTERIM DIVIDEND
The directors approved an interim ordinary dividend of 169 cents per share on Tuesday
25 September 2012. The dividend will be payable on Monday 22 October 2012.
Last day to trade cum dividend Friday 12 October 2012
Trading ex-dividend commences Monday 15 October 2012
Record date Friday 19 October 2012
Payment date Monday 22 October 2012
Share certificates may not be dematerialised or rematerialised between Monday 15 October
2012 and Friday 19 October 2012, both days inclusive.
In terms of the new Dividends Tax effective from 1 April 2012, and the amendments to
section 11.17 of the JSE Listing Requirements, the following additional information
is disclosed:
(1) The local dividend tax rate is 15%.
(2) The full dividend will be subject to dividends withholding tax. The dividend
will not be paid out of contributed tax capital and there are no secondary
tax credits available for utilisation. Accordingly, the net cash dividend per
share is 143.65 cents.
(3) Capitec's issued ordinary share capital is 100 363 200 shares as at 25 September 2012.
(4) Capitec's tax reference number is 9405/376/84/0.
INTERIM CONSOLIDATED BALANCE SHEET
Six
months
Reviewed Unaudited August Audited
August August 2012/ February
2012 2011 2011 2012
R'000 R'000 R'000
ASSETS
Cash and cash equivalents 7 097 122 3 247 637 119 4 551 203
Investments designated at
fair value 923 564 907 945 2 1 198 833
Loans and advances to clients 22 823 468 13 393 174 70 16 863 028
Inventory 50 524 23 503 15 42 079
Other receivables 80 043 53 717 49 57 745
Current income tax assets 61 841 - 62 331
Property and equipment 673 052 479 977 40 543 121
Intangible assets 122 182 54 422 125 69 262
Deferred income tax assets 209 093 64 546 224 234 242
Total assets 32 040 889 18 224 921 76 23 621 844
LIABILITIES
Loans and deposits at
amortised cost 25 607 827 13 678 188 87 17 692 062
Provisions 16 877 16 356 3 24 998
Other liabilities 786 360 616 178 28 718 549
Current income tax
liabilities 161 88 681 (100) 885
Total liabilities 26 411 225 14 399 403 83 18 436 494
EQUITY
Ordinary share capital and
premium 3 164 676 2 123 125 49 2 926 435
Cash flow hedge reserve (23 901) (6 712) 256 (1 920)
Retained earnings 2 229 920 1 450 136 54 2 001 866
Share capital and reserves
attributable to ordinary
shareholders 5 370 695 3 566 549 51 4 926 381
Non-redeemable,
non-cumulative,
non-participating preference
share capital and premium 258 969 258 969 - 258 969
Total equity 5 629 664 3 825 518 47 5 185 350
Total equity and liabilities 32 040 889 18 224 921 76 23 621 844
INTERIM CONSOLIDATED INCOME STATEMENT
Reviewed Unaudited
Six Six Six Audited
months months months Year
ended ended August ended
August August 2012/ February
2012 2011 2011 2012
R'000 R'000 % R'000
Interest income 3 034 829 1 939 554 56 4 346 902
Interest expense (725 627) (450 856) 61 (1 022 374)
Net interest income 2 309 202 1 488 698 55 3 324 528
Loan fee income 782 453 819 925 (5) 1 657 018
Loan fee expense (151 013) (96 188) 57 (186 360)
Transaction fee income 917 712 590 468 55 1 360 308
Transaction fee expense (335 061) (229 638) 46 (524 202)
Net fee income 1 214 091 1 084 567 12 2 306 764
Dividend income 9 727 (99) 1 532
Net impairment charge on
loans and advances to
clients (1 018 613) (678 866) 50 (1 604 190)
Net movement in financial
instruments held at fair
value through profit
loss 2 533 6 321 (60) 12 070
Other income 281 18 679
Sales 136 650 104 659 31 217 145
Cost of sales (120 813) (93 656) 29 (191 996)
Non-banking income 15 837 11 003 44 25 149
Income from operations 2 523 340 1 912 468 32 4 066 532
Banking operating expenses (1 485 249) (1 182 772) 26 (2 486 318)
Non-banking operating
expenses (11 742) (11 034) 6 (22 342)
Operating profit before tax 1 026 349 718 662 43 1 557 872
Income tax expense (315 541) (220 966) 43 (463 532)
Profit for the period 710 808 497 696 43 1 094 340
Earnings per share (cents)
· Basic 702 518 35 1 122
· Diluted 691 505 37 1 096
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Reviewed Unaudited
Six Six Six Audited
months months months Year
ended ended August ended
August August 2012/ February
2012 2011 2011 2012
R'000 R'000 % R'000
Profit for the period 710 808 497 696 43 1 094 340
· Cash flow hedge before
tax (30 426) (4 504) 838 2 151
· Income tax relating to
cash flow hedge 8 445 1 261 (288) (602)
Other comprehensive income
for the period net of tax (21 981) (3 243) 1 549
Total comprehensive income
for the period 688 827 494 453 39 1 095 889
RECONCILIATION OF ATTRIBUTABLE EARNINGS TO HEADLINE EARNINGS
Reviewed Unaudited
Six Six Six Audited
months months months Year
ended ended August ended
August August 2012/ February
2012 2011 2011 2012
R'000 R'000 % R'000
Net profit after tax 710 808 497 696 43 1 094 340
Preference dividend (10 706) (9 763) (10) (19 419)
Net profit after tax
attributable to
ordinary shareholders 700 102 487 933 43 1 074 921
Non-headline items:
(Profit)/loss - disposal of
· Property and equipment (147) 1 176 (113) 596
· Income tax charge
property and equipment 43 (344) (112) (192)
· Intangible assets 16 960 (98) 3 048
· Income tax charge
intangible
assets (4) (269) (99) (853)
Headline earnings 700 010 489 456 43 1 077 520
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
Reviewed Unaudited
Six Six Audited
months months Year
ended ended ended
August August February
2012 2011 2012
R'000 R'000 R'000
Cash flow from operating activities 2 836 438 693 663 1 803 314
Cash flow from investing activities (17 404) (115 288) (578 101)
Cash flow from financing activities (273 115) (172 656) 484 072
Net increase in cash and cash
equivalents 2 545 919 405 719 1 709 285
Cash and cash equivalents at the
beginning of the period 4 551 203 2 841 918 2 841 918
Cash and cash equivalents at the
end of the period 7 097 122 3 247 637 4 551 203
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Reviewed Unaudited
Six Six Audited
months months Year
ended ended ended
August August February
2012 2011 2012
R'000 R'000 R'000
Equity at the beginning of the period 5 185 350 3 450 513 3 450 513
Total comprehensive income for
the period 688 827 494 453 1 095 889
Ordinary dividend (297 847) (193 837) (317 939)
Preference dividend (10 706) (9 763) (19 419)
Employee share option scheme:
Value of employee services 6 936 6 324 11 778
Shares issued and acquired for
employee share options at cost (238 357) (204 534) (702)
Proceeds on settlement of
employee share options 34 517 31 131 35 091
Tax effect on share options 22 703 46 783 142 886
Shares issued 238 357 204 534 798 932
Share issue expenses (116) (86) (11 679)
Equity at the end of the period 5 629 664 3 825 518 5 185 350
COMMITMENTS
Reviewed Unaudited Audited
August August February
2012 2011 2012
R'000 R'000 R'000
Capital commitments approved by the
board
· Contracted for
Property and equipment 91 437 36 281 85 195
Intangible assets 9 322 2 654 6 744
· Not contracted for
Property and equipment 176 660 199 339 458 247
Intangible assets 41 325 43 575 122 329
Reviewed Unaudited Audited
August August February
2012 2011 2012
R'000 R'000 R'000
Operating lease commitments
Future aggregate minimum lease
payments
· Within one year 192 781 154 356 170 248
· From one to five years 544 784 434 310 475 371
· After five years 124 184 84 173 99 694
Total future cash flows 861 749 672 839 745 313
Straight-lining accrued (41 461) (30 088) (35 749)
Future expenses 820 288 642 751 709 564
SEGMENT ANALYSIS
The group has two operating segments which conduct business within the Republic of South
Africa:
· Banking - incorporating retail banking services including savings, deposits, debit
cards, cell phone and internet banking and consumer loans to individuals.
· Wholesale distribution - consisting of the wholesale distribution of fast moving
consumer goods.
There are no clients that account for more than 10% of revenue.
Transactions between the business segments are on normal commercial terms and
conditions.
Banking segment revenue consists of interest income and fee income on consumer loans,
transaction fee income on savings accounts, dividend income and other income. Wholesale
distribution revenue consists of sales of fast moving consumer goods.
The segment information provided to the executive management committee for the
reportable segments is as follows:
Wholesale Intra-
Banking distribution segment Total
R'000 R'000 R'000 R'000
Reviewed six months ended
August 2012
Segment revenue 4 735 470 136 650 (186) 4 871 934
Segment earnings after tax 707 882 2 926 - 710 808
The following items are
included in segment
earnings after tax:
Interest income 3 035 015 - (186) 3 034 829
Interest expense (725 602) (211) 186 (725 627)
Net fee income 1 214 091 - - 1 214 091
Net impairment charge (1 018 340) (273) - (1 018 613)
Depreciation (89 746) (246) - (22 493)
Other operating expenses (1 373 010) (11 496) - (1 384 506)
Unaudited six months ended
August 2011
Segment revenue 3 351 223 104 659 (531) 3 455 351
Segment earnings after tax 498 341 (645) - 497 696
The following items are
included in segment
earnings after tax:
Interest income 1 940 085 - (531) 939 554
Interest expense (450 833) (554) 531 (450 856)
Net fee income 1 084 567 - - 1 084 567
Net impairment charge (678 806) (60) - (678 866)
Depreciation (63 493) (219) - (63 712)
Amortisation (11 623) - - (11 623)
Other operating expenses (1 107 656) (10 815) - (1 118 471)
Audited year ended February
2012
Segment revenue 7 367 351 217 145 (912) 7 583 584
Segment earnings after tax 1 092 630 1 710 - 1 094 340
The following items are
included in segment
earnings after tax:
Interest income 4 347 814 - (912) 4 346 902
Interest expense (1 022 329) (957) 912 (1 022 374)
Net fee income 2 306 764 - - 2 306 764
Net impairment charge (1 604 052) (138) - (1 604 190)
Depreciation (145 141) (457) - (145 598)
Amortisation (27 920) - - (27 920)
Other operating expenses (2 313 257) (21 885) - (2 335 142)
NOTES
The condensed consolidated interim financial statements are prepared in accordance with
International Accounting Standard (IAS) 34 `Interim Financial Reporting', the
requirements of the Companies Act of South Africa (Act No 71 of 2008), as amended, and
the Listings Requirements of the JSE Limited. These condensed consolidated interim
financial statements should be read in conjunction with the annual financial statements
for the year ended 29 February 2012, which were prepared in accordance with IFRS. The
accounting policies applied conform to IFRS and are consistent with those applied in the
previous year. Standards, interpretations and amendments to published standards applied
for the first time during the current financial year did not have any significant impact
on the financial statements. The group complies in all material respects with the
requirements of the King III Code.
The preparation of the condensed consolidated interim financial statements was
supervised by the chief financial officer, André du Plessis CA(SA).
AUDITOR'S REPORT
The company's external auditors, PricewaterhouseCoopers Inc., have reviewed the
condensed interim financial report. A copy of their unqualified review opinion is
available on request at the company's registered office.
On behalf of the board
Michiel le Roux
Chairman
Riaan Stassen
Chief executive officer
Stellenbosch
26 September 2012
COMPANY SECRETARY AND REGISTERED OFFICE
Christian George van Schalkwyk: BComm, LLB, CA(SA)
1 Quantum Road, Techno Park, Stellenbosch 7600, PO Box 12451, Die Boord, 7613
TRANSFER SECRETARIES
Computershare Investor Services (Proprietary) Limited
(Registration number: 2004/003647/07)
Ground Floor, 70 Marshall Street, Johannesburg 2001,
PO Box 61051, Marshalltown 2107
SPONSOR
PSG Capital (Proprietary) Limited (Registration number: 2006/015817/07)
DIRECTORS
MS du P le Roux (Chairman), R Stassen (CEO)*, AP du Plessis (CFO)*, Ms RJ Huntley,
JD McKenzie, Prof MC Mehl, Ms NS Mjoli-Mncube, PJ Mouton, CA Otto,JP van der Merwe
*Executive
capitecbank.co.za
enquiries@capitecbank.co.za
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