TRANSACTION CAPITAL LIMITED - AGM Statement by the Group Chief Executive Officer

AGM Statement by the Group Chief Executive Officer

TRANSACTION CAPITAL LIMITED
(formerly Transaction Capital Proprietary Limited)
(Incorporated in the Republic of South Africa)
Registration number 2002/031730/06
JSE share code: TCP
ISIN: ZAE000167391
(“Transaction Capital” or “the Company”)

ANNUAL GENERAL MEETING STATEMENT BY THE GROUP CHIEF
EXECUTIVE OFFICER

INTRODUCTION
Over the past few weeks shareholders will have received hard copies of Transaction Capital’s 2012
Integrated Annual Report, which was posted on our website on 1 February 2013. The objective of
our first integrated report was to provide stakeholders with sufficient information to make fully
informed decisions on their relationship with the Group. While we believe that the disclosure was
relevant and comprehensive, we welcome any suggestions as to how this report might be
improved in future years.

Notwithstanding a tightening of economic conditions, it is gratifying to advise shareholders that
Transaction Capital has made pleasing progress towards its strategic, operational and financial
objectives in the first five months of the 2013 financial year.


OPERATIONAL PERFORMANCE
Each of the divisions is performing in line with expectations, with the following being the most
notable developments.

Asset backed lending
SA Taxi – minibus taxi finance; Rand Trust – invoice discounting and commercial
receivables management to SME’s

Growth in gross loans and advances continues in the mid-teens on an annualised basis.

SA Taxi has moved to Midrand where the collocation of its offices and its Taximart refurbishment
facility will enable better control and coordination. Credit quality was enhanced throughout the
period by a weighting towards the financing of premium, lower risk new vehicles, with a
conservative approach to funding entry level vehicles. Origination levels and collections are as
planned, with credit metrics in line or slightly ahead of expectations.
Rand Trust continues to invest in the structures and staffing necessary to grow its SME client base
nationally.

Unsecured lending
Bayport – unsecured credit and related products

The slowing growth of unsecured credit extension nationally reflects both the caution of credit
providers and the concerns expressed by the National Treasury and the National Credit Regulator.

The rate at which Bayport originates unsecured loans continues to be determined by capital
rationing and an emphasis on lower risk bands rather than the pursuit of growth.

During the quarter credit criteria were tightened, favouring repeat clients and the extension of
term and limit. Credit metrics are in line with past trends and expectations.

The following information is available on Transaction Capital’s website regarding Bayport
Securitisation (RF) Ltd.

Growth in gross loans and advances of 50% to R5.4 billion for the 12 months to 31 January 2013 is
as a result of both larger loans (not consolidation loans) to lower risk repeat clients and smaller
loans to new clients. This is reflected in the number of loans having increased only 24% (for 12
months) to 347,004 over the same period.

Provision coverage has increased to 17% at 31 January 2013, with the non-performing loan ratio at
circa 30% for the 9 months to 31 January 2013. Vintages continue to track in a tight band, and are
in line with historical trends.

Bayport will continue to invest in the people, systems and processes necessary to ensure
responsible market conduct within the letter and spirit of all laws, regulations and practices
pertaining to unsecured lending. Concurrently the value proposition to clients is being
augmented with additional products and services to further differentiate Bayport’s market
positioning.

Credit services
MBD Credit Solutions – debt collection as agent and principal; Principa – credit risk
management consulting

MBD Credit Solutions performed to expectation with tight expense control mitigating the lower
than expected growth of agency and principal collections arising from the restructuring of certain
call centres.

The performance of Principa was in line with expectations.

Payment services
Paycorp – deployer and operator of off bank premise ATMs
The core ATM business experienced growth ahead of expectations with increases in the number
of active ATM’s, as well as in the volumes and values of transactions. The early stage prepaid
debit card business performed as expected.

FUNDING

The Group remains adequately funded in terms of projected origination and cash requirement
levels. Transaction Capital continues to enjoy support from its existing funder base.

Since September 2012:
    * Bayport Securitisation (RF) Ltd has issued total debt of R675 million with the last issue of 5-
       year bullet Class A notes being priced at a credit margin of 425 bps above the relevant
       government curve.
    * Two new debt investors have been added to BaySec.

Equity raised prior to and during the IPO has resulted in a capital adequacy of 34%.

OUTLOOK

While there is little to suggest that 2013 will be anything other than a 
challenging year for South African consumers, Transaction Capital is confident that previously reported
performance trends will persist in the current year.

Transaction Capital will provide the results for the half year ending 31 st March 2013 on or before
the 3rd June 2013, with any announcements prior to that as required by the JSE.

The above information has not been reviewed or reported on by the Company’s external auditors.

Sandton
5 March 2013

Sponsor
Deutsche Securities (SA) Proprietary Limited

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