General repurchase of non-redeemable, non-cumulative, non-participating preference shares (“preference shares’) 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" or "the Company") GENERAL REPURCHASE OF NON-REDEEMABLE, NON-CUMULATIVE, NON-PARTICIPATING PREFERENCE SHARES (“PREFERENCE SHARES’) In 2010 the Basel Committee on Banking Supervision published its global regulatory framework for more resilient banks and banking systems (“Basel III”). The Regulations relating to Banks were amended to provide, among other things, for the partial implementation of Basel III in South Africa and came into effect on 1 January 2013. Prior to the implementation of Basel III, the preference share capital of Capitec contributed fully to the capital adequacy ratio of the Company. As a result of the “grandfathering” provisions provided for in Basel III, the contribution of the preference shares to the Company’s capital adequacy ratio reduces by 10% per annum. As at 31 January 2014, only 80% of the original preference share capital contributes to Capitec’s capital adequacy ratio. In the notice of the Capitec annual general meeting held on 30 May 2014 (“the AGM”), shareholders were advised that the board of the Company may resolve to repurchase preference shares due to the preference shares’ declining contribution to the Company’s capital adequacy ratio. Shareholders were further advised that any repurchases under the general authority would be at market value in accordance with the provisions set out under the relevant special resolution. At the AGM, shareholders granted a general authority to the board of Capitec to repurchase up to 20% of the issued preference share capital of Capitec. Shareholders are hereby advised that Capitec has cumulatively repurchased, on 23 July 2014, 185 000 of its preference shares (comprising 6.45% of its issued preference share capital), out of the Company’s available cash resources. The preference shares were repurchased for an aggregate value of R15 721 503.50. Date of Number of Highest Lowest Aggregate repurchase preference price per price per value shares preference preference repurchase share shares d 23 July 185 000 R85 R84.50 R15 721 5 2014 03.50 The repurchases were made in terms of the general authority granted by shareholders at the AGM, and were affected through the order book operated by the JSE trading system without any prior understanding or arrangement between the Company and the counter parties. The preference shares repurchased will be de-listed and cancelled upon registration of the preference share in the name of Capitec. Capitec is entitled to repurchase a further 388 803 preference share (13.6% of the preference shares in issue as at the date of the authority), in terms of the current general authority, which is valid until Capitec’s next annual general meeting, subject to the requirements of the Banks Act. OPINION OF THE BOARD OF THE COMPANY The board of Capitec has considered the effect of the repurchases and is of the opinion that, for a period of 12 months following the date of this announcement: - the Company and the Group will be able to repay their debts, in the ordinary course of business; - the consolidated assets of the Company and the Group will be in excess of the consolidated liabilities of the Company and the Group; - the Company’s and the Group’s share capital and reserves will be adequate for the purposes of the business of the Company and the Group; and - the Company and the Group will have sufficient working capital for ordinary business purposes. PRO FORMA FINANCIAL EFFECTS OF THE REPURCHASES The unaudited pro-forma financial effects, as set out below, have been prepared to assist Capitec shareholders in assessing the impact of the repurchases on earnings per share, headline earnings per share, net asset value per share and net tangible asset value per share of Capitec as at and for the twelve months ended 28 February 2014. These unaudited pro forma financial effects have been prepared for illustrative purposes only and because of their nature, may not fairly present Capitec’s financial position after the repurchases. The directors of Capitec are responsible for the preparation of the financial effects and they have not been reviewed by Capitec’s auditors. Before the After the % change repurchases repurchases (cents) (cents) Earnings per share 1 752 1 752 - Headline earnings 1 752 1 752 - per share Diluted earnings 1 740 1 740 - per share Diluted headline 1 740 1 740 - earnings per share Net asset value 8 433 8 433 - per share Tangible net asset 8 259 8 259 - value per share NOTES AND ASSUMPTIONS - The figures set out in the “Before the repurchases” column have been extracted from the audited results for the twelve months ended 28 February 2014. - The repurchases are assumed to have been implemented on 1 March 2013 for earnings and headline earnings per share purposes and on 28 February 2014 for net asset and tangible net asset value per share purposes. - The repurchases consist of the repurchase of 185 000 preference shares at an average price of R84.9811 per preference share for an aggregate value of R15.7 million. - It is assumed that the repurchases were funded out of the available cash resources of the Group being Capitec and its subsidiaries, which was earning interest at a before tax interest rate of 5.22% per annum. - As at the date of this announcement, the Company held zero preference shares in treasury. - All adjustments set out above are expected to have a continuing effect. Stellenbosch 25 July 2014 Sponsor and corporate advisor PSG Capital (Pty) Limited Date: 25/07/2014 08:59:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.