Wrap Text
Unaudited Financial Results For The Six Months Ended 31 August 2016
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' or 'the Group')
unaudited financial results
for the six months ended 31 August 2016
Headline earnings per share up 19% to 1 517 cents
Headline earnings up 19% to R1.754 billion
Interim dividend per share up 20% to 450 cents
Return on equity: 26%
Active clients: 7.9 million
New jobs created: 1 445
Six months Year ended
ended August Change % February
2016 /
Key performance indicators 2016 2015 2015 2016
Profitability
Interest income R'm 7 017 6 042 16 12 475
Net loan fee income R'm 510 399 28 855
Net transaction fee income R'm 1 851 1 414 31 3 020
Interest paid R'm (1 708) (1 372) 24 (2 884)
Other income R'm – (3) (1)
Income from operations R'm 7 670 6 480 18 13 465
Net loan impairment expense R'm (2 600) (2 113) 23 (4 401)
Net income R'm 5 070 4 367 16 9 064
Operating expenses R'm (2 626) (2 315) 13 (4 591)
Income before tax R'm 2 444 2 052 19 4 473
Tax R'm (685) (575) 19 (1 244)
Preference dividend R'm (8) (9) (11) (16)
Earnings attributable to ordinary shareholders
Basic R'm 1 751 1 468 19 3 213
Headline R'm 1 754 1 469 19 3 222
Net transaction fee income to net income % 37 32 33
Net transaction fee income to operating expenses % 70 61 66
Cost-to-income ratio % 34 36 34
Return on ordinary shareholders' equity % 26 26 27
Earnings per share
Attributable cents 1 514 1 270 19 2 779
Headline cents 1 517 1 271 19 2 787
Diluted attributable cents 1 508 1 265 19 2 773
Diluted headline cents 1 511 1 266 19 2 781
Dividends per share
Interim cents 450 375 20 375
Final cents 680
Total cents 1 055
Dividend cover x 2.6
Assets
Net loans and advances R'm 36 938 33 649 10 35 760
Cash and short-term funds R'm 27 481 22 839 20 24 989
Other R'm 3 101 2 066 50 2 196
Total assets R'm 67 520 58 554 15 62 945
Liabilities
Deposits R'm 51 384 45 042 14 47 940
Other R'm 1 517 1 135 34 1 346
Total liabilities R'm 52 901 46 177 15 49 286
Equity
Shareholders' funds R'm 14 619 12 377 18 13 659
Capital adequacy ratio % 34 35 35
Net asset value per ordinary share cents 12 493 10 539 19 11 663
Share price cents 58 258 48 285 21 47 400
Market capitalisation R'm 67 362 55 830 21 54 807
Number of shares in issue '000 115 627 115 627 115 627
Share options
Number outstanding '000 1 003 1 036 (3) 868
Number outstanding to shares in issue % 0.9 0.9 0.8
Average strike price cents 31 420 25 188 25 28 520
Average time to maturity months 25 27 (7) 27
Operations
Branches 751 691 9 720
Employees 12 479 11 034 13 11 440
Active clients '000 7 917 6 708 18 7 269
ATMs
Own 1 453 1 071 36 1 236
Partnership 2 474 2 575 (4) 2 469
Total 3 927 3 646 8 3 705
Capital expenditure R'm 712 307 132 704
Sales
Loans
Value of loans advanced R'm 12 810 11 070 16 24 228
Number of loans advanced '000 1 711 1 798 (5) 3 684
Average loan amount R 7 487 6 157 22 6 577
Repayments R'm 16 086 13 646 18 28 689
Gross loans and advances R'm 42 812 37 898 13 40 891
Loans past due (arrears) R'm 2 561 1 781 44 2 297
Arrears to gross loans and advances % 6.0 4.7 5.6
Arrears rescheduled < 6 months R'm 1 645 1 167 41 1 542
Arrears and arrears rescheduled < 6 months to gross loans and
advances % 9.8 7.8 9.4
Rescheduled from current < 6 months R'm 1 535 1 542 – 1 818
Arrears and all rescheduled < 6 months to gross loans and
advances % 13.4 11.8 13.8
Provision for doubtful debts R'm 5 874 4 249 38 5 131
Provision for doubtful debts to gross loans and advances % 13.7 11.2 12.5
Arrears coverage ratio % 229 239 223
Arrears and arrears rescheduled < 6 months coverage ratio % 140 144 134
Arrears and all rescheduled < 6 months coverage ratio % 102 95 91
Loan revenue R'm 6 737 5 906 14 12 145
Loan revenue to average gross loans and advances % 16.1 15.9 31.5
Gross loan impairment expense R'm 3 137 2 510 25 5 255
Recoveries R'm 537 397 35 854
Net loan impairment expense R'm 2 600 2 113 23 4 401
Net loan impairment expense to loan revenue % 38.6 35.8 36.2
Net loan impairment expense to average gross loans and advances % 6.2 5.7 11.4
Deposits
Wholesale deposits R'm 8 351 10 429 (20) 10 154
Retail call savings R'm 26 893 21 851 23 24 152
Retail fixed savings R'm 16 140 12 762 26 13 634
Strong client growth in a challenging economy
Active clients continued to grow with 648 000 new clients joining Capitec Bank in the past six months compared
to 561 000 in the previous six months. This positive movement is largely attributed to a combination of increased
branch distribution in key malls and a strong brand proposition of simplified banking and value for money.
Capitec Bank opened 31 new branches during the reporting period, bringing the total branches to 751. Branches
are open for retail trading hours during the week while 280 branches, primarily in shopping malls, are open for
seven days a week, ensuring that our banking offer is accessible when people really need it.
Consistently conservative
The current economic climate puts the consumer's ability to qualify for credit under pressure. Credit client
growth and the total book remain flat due to strict affordability guidelines and prudent credit assessments.
Based on continuous market assessment, we have limited credit extension to lower income earners, employees
in particular industries and more specifically to particular business units which we believe are at high risk of
having unstable income. This conservative approach to credit is characteristic of the business and will ensure
long-term sustainability.
Strong brand loyalty evident in banking client growth
The number of primary banking clients (those clients who make regular deposits – mainly salaries) has
grown in line with total client growth and represents 46% of all active clients. This trend is also evident in the
comprehensive AMPS survey which, according to the latest results for December 2015, indicated that 22.4%
of the banked population regard Capitec Bank as their primary bank, up from 20.6% for the period to June
2015. The number of primary banking clients is a strong indicator of commitment to the brand. These clients
are more profitable since they do on average 5 times more transactions than non-primary banking clients.
Higher efficiency through self-help banking
Net transaction fee income to operating expenses continued healthy growth to 70% for the six-month period
ended August 2016 (six months to August 2015: 61%; year ended February 2016: 66%). This is driven primarily
by higher transaction activity by our growing primary banking client base. Marginal price increases at the
beginning of the financial year were only applied to in-branch and cash-based transactions, while the pricing
of banking on our remote channels remained unchanged. Remote channel transactions are priced at less than
half of branch transactions. This is part of the bank's strategy to increase out-of-branch transacting, which will
improve capacity and efficiencies in the branches.
Over the past six months new functionality was added to our remote banking app in order to help clients manage
their money anytime from anywhere in the world. The number of clients banking on their phones using USSD
and the app has grown significantly to over 3.2 million.
Earnings up 19%
Earnings increased by 19.4% to R1.8 billion from R1.5 billion a year ago. Solid growth from loan fee income
and transaction fee income contributed to the strong year-on-year increase.
Net transaction fee income increased by 31%
Our transactional banking continues to grow rapidly in line with the increased client numbers and increased
transactions by clients, both in branch and using remote access.
Net transaction fee income contributed 37% (six months to August 2015: 32%; year ended February 2016:
33%) of our net income.
We continually strive to offer our clients the best value proposition for their banking needs. We are therefore
proud that this was recognised in the recent Solidarity banking charges report that again found that Capitec
offers the most affordable bank account in South Africa.
Operating costs increased by 13%
Operating costs for the six-month period were R2.6 billion, which represents a year-on-year increase of 13%
(six months to August 2015: R2.3 billion). The growth was as a result of employee numbers increasing by 13%
due to the expanding branch network and the employment of more people in key support departments, mainly
information technology. Premises, security and information technology were the other major contributors towards
the increase. The cost-to-income ratio decreased from 36% for the six-month period ended August 2015 to
34% for the six-month period ended August 2016.
Capital expenditure increased 132% to R712 million for the six-month period ended August 2016 (August
2015: R307 million) due to an increase in the rollout of ATMs (R160 million), the opening of new branches and
spend on information technology. All of these are critical to support our growing client base whilst increasing
our footprint across the country.
Emphasis on our employees
Our client service, and therefore our success, depends on our staff. 352 of our staff attended leadership courses
during the six-month period ended August 2016, while 2 757 staff were involved in specific training courses.
All operational employees were involved in continuous training. We have accelerated leadership development
through three levels of management, from team leader to senior managers, across functions.
Our focus during the period has been to review all our employee benefits. We introduced benefits that are
relevant and appropriate to our employees. This ranged from medical cover to financial health programs, and
also temporary disability cover. The reward is employee turnover that continued to be below the industry average
in the past half-year.
Gross loans and advances increased by 13%
Gross loans and advances grew by 13% year-on-year and by 5% from February 2016 to R42.8 billion (August
2015: R37.9 billion; February 2016: R40.9 billion). Net loan impairment expense to average gross loans and
advances increased to 6.2% for the six-month period ended August 2016 from 5.7% a year ago and 5.8% for
the six-month period ended February 2016.
Given the challenging economic conditions, we continued to tighten our credit granting criteria. This resulted
in reducing credit risk by lending to better quality clients and granting fewer loans. Fewer high-risk, low value,
shorter-term loans were granted, resulting in a 5% year-on-year decrease in the number of loans granted and
an increase in the average size of new loans to R7 487 (August 2015: R6 157; February 2016: R6 577).
The overall term of the outstanding book shortened slightly to 39 months at August 2016 (August 2015:
41 months; February 2016: 40 months).
Arrears as a percentage of gross loans and advances increased to 6.0%
Arrears increased by 44% year-on-year and by 11% from February 2016 to R2.6 billion (August 2015: R1.8
billion; February 2016: R2.3 billion), while arrears to gross loans and advances increased to 6.0% (August 2015:
4.7%; February 2016: 5.6%). The tough economic conditions can impact clients in a number of ways. Client
financial stress increases and is exacerbated by additional financial stress on employers that can often result
in late or no salary payments. To address these risks, management responded decisively by changing granting
rules and increasing the provision for doubtful debts.
Rescheduled loans
We reschedule loans to mitigate credit risk. Clients reschedule mainly to overcome temporary cash flow
shortages. Clients who are rescheduled from an arrears status show renewed willingness to pay and maintain
a relationship with Capitec that would be lost if they were handed over. For Capitec, rescheduling is an effective
collection strategy that is closely monitored by management on a daily basis. It is more profitable than handing
a client over to the legal process.
Rescheduling a loan does not necessarily reduce the risk of default - hence a higher provision is maintained
on rescheduled loans in comparison to the remainder of the book.
Loans that were rescheduled from arrears during the first six months of the year increased by 41% year-on-
year and by 7% from February 2016 to R1.6 billion (August 2015: R1.2 billion; February 2016: R1.5 billion). This
is due to a combination of the growth in our loan book, credit granting strategy changes implemented during
the 2016 financial year, validated rescheduling policy changes implemented during December 2015 as well as
the impact of the current economic conditions on our clients.
When a client reschedules a loan, all his loans are moved to a rescheduled segment resulting in a higher provision
percentage across all the loans. Furthermore, when a client reschedules out of arrears he is not considered
to be rehabilitated immediately and the arrears provision is maintained and released over time to ensure our
philosophy of conservative provisioning over the rehabilitation period.
Our provision model remains conservative
The provision for doubtful debts increased by 38% year-on-year and by 14% from February 2016 to R5.9 billion
(August 2015: R4.2 billion; February 2016: R5.1 billion).
The total provision compared to the gross loan book amounts to 13.7% at August 2016 (August 2015: 11.2%;
February 2016: 12.5%). The level of the provision to arrears remains high at 229% (August 2015: 239%; February
2016: 223%).
We provide 8% on up-to-date loans, 49% on loans one instalment behind, 79% for two instalments and 90%
for three instalments. We provide on average 52% on clients that rescheduled any of their loans whilst in
arrears within the last six months, although they are up-to-date in terms of the new agreement. For clients who
rescheduled any of their loans whilst up-to-date within the last six months and are still up to date, we provide on
average 17%. All provisions are based on the probability of further default. All outstanding balances of clients
who are 90 days in arrears on any loan are fully provided for or written off.
The gross loan impairment expense of R3.1 billion for the six-month period ended August 2016 increased by
25% year-on-year and by 14% from the six-month period ended February 2016. The table below analyses the
increases:
Six months ended Change %
August February August August 2016/ August 2016/
2016 2016 2015 February 2016 August 2015
Write-offs R'm 2 394 1 863 2 118 29 13
Movement in bad debt
provision R'm 743 882 392 (16) 90
Gross loan
impairment expense R'm 3 137 2 745 2 510 14 25
The net loan impairment expense to loan revenue was 38.6% for the six-month period ended August
2016, compared to 35.8% for the six-month period ended August 2015 and 36.2% for the year ended
February 2016.
Arrears and book quality continue to perform within our risk appetite.
Recoveries
Recoveries increased by 35% to R537 million for the six-month period ended August 2016, from R397 million
for the six-month period ended August 2015 and R457 million for the six-month period ended February 2016.
The increase was the result of more effective and efficient internal procedures as well as a larger handed over
book. The retrenchment book, which is fully insured, also increased in the current difficult economic conditions.
Capital remains strong
The annualised return on equity for the six-months was 26% (August 2015: 26%). Capitec remains well
capitalised and is generating sufficient profit to fund growth in the loan book. At August 2016, the capital
adequacy ratio was 34.0%.
Retail deposits grew by R8.4 billion
Retail deposits amounted to R43.0 billion at 31 August 2016, an increase of R8.4 billion to the prior
year. The continued growth in retail deposits indicates the strong brand acceptance of the bank. The value of
wholesale deposits declined to R8.4 billion at August 2016, from R10.4 billion at August 2015. This was as
a result of instruments that matured and were deliberately only partially refinanced due to strong retail fixed
deposit growth and good capital generation. At a bond auction on 6 May 2016, we received bids totalling
R2.2 billion and subsequently issued bonds totalling R750 million. We appreciate the continued support of the
domestic capital markets.
Capitec maintained its conservative liquidity policy, retaining long-term funding to match longer term assets.
Retail call deposits are not used to finance long-term loans.
The liquidity position remained healthy and in line with our conservative liquidity policy. We comfortably exceed
the Basel 3 liquidity standards, which measures our ability to survive severe stress due to a loss of support
from institutional funders. This also measures how well the bank matches cash inflows from assets with its
cash outflows to funders and depositors.
Regulation
The Department of Trade and Industry ('DTI') published final regulations for interest rate limits and fees for credit
agreements that became effective from 6 May 2016. Capitec complies with the limits. The bank launched credit
life and retrenchment insurance products linked to lending products from 6 May 2016 under the proposed fee
limits. In principle we never charge clients a higher total credit fee than in the past.
We continue to support appropriate regulation enhancing the sustainability of the credit industry and to reduce
the cost of credit for consumers if this is done in a manner that is sustainable and achieves a balance between
affordability and access to credit.
Contingent liability
During February 2016 the National Credit Regulator ('NCR') alleged that Capitec Bank Limited had contravened
the National Credit Act and referred the matter to the National Consumer Tribunal. The referral was withdrawn
by the NCR on 21 September 2016. There are no more referrals pending between Capitec Bank and the NCR.
Changes in board composition and executive management
Michiel le Roux stepped down as chairman on 27 May 2016 and was succeeded by Riaan Stassen, previous
chief executive of Capitec until 31 December 2013. Michiel continues to serve on the board as a non-executive
director. The chairman and the other members of the board thank Michiel on behalf of all stakeholders for his
exceptional leadership over the past nine years.
Gerrit Pretorius and Jackie Huntley, independent non-executive directors, stepped down from the board on 27
May 2016 and 21 September 2016 respectively. Nkosana Mashiya, executive: risk management, was appointed
as an executive director on 1 June 2016.
After 15 years of outstanding and dedicated service, Carl Fischer, co-founder of the bank responsible
for marketing and corporate affairs, retired in May 2016. We are indebted to Carl for his contribution in
developing the bank and his continued focus on client service. He is succeeded by Francois Viviers who has
been with Capitec since 2011.
Prospects
The slowdown in South Africa's economic growth will continue to place pressure on consumers. As the increase
in our client numbers over the past six months has shown, clients will continue to seek value and better service
from their bank. We will maintain our conservative approach to credit in the current conditions.
We remain relentless in the pursuit of continued service excellence and our strategy to be the best retail bank
for all South Africans.
Interim dividend
The directors declared a gross interim dividend of 450 cents per ordinary share on Monday, 26 September
2016. The dividend will be paid on Monday, 17 October 2016. There are 115 626 991 ordinary shares in issue.
The dividend meets the definition of a dividend in terms of the Income Tax Act (Act 58 of 1962). The dividend
amount net of South African dividend tax of 15% is 382.50000 cents per share. The distribution is made from
income reserves. Capitec's tax reference number is 9405376840.
Last day to trade cum dividend Tuesday, 11 October 2016
Trading ex-dividend commences Wednesday, 12 October 2016
Record date Friday, 14 October 2016
Payment date Monday, 17 October 2016
Share certificates may not be dematerialised or rematerialised from Wednesday, 12 October 2016 to Friday,
14 October 2016, both days inclusive.
Audited
Year
Unaudited Unaudited ended
August August August February
2016/
Condensed consolidated statement of 2016 2015 2015 2016
financial position R'm R'm % R'm
Assets
Cash, cash equivalents and money market funds 15 090 10 563 43 14 165
Investments designated at fair value – 1 449 –
Available-for-sale financial assets 100 – –
Held-to-maturity investments 5 350 2 639 103 3 635
Term deposit investments 7 041 8 188 (14) 7 189
Loans and advances to clients 36 938 33 649 10 35 760
Other receivables 594 389 53 216
Derivative assets 143 104 38 225
Current income tax asset 111 102 9 53
Property and equipment 1 408 964 46 1 110
Intangibles 400 230 74 243
Deferred income tax asset 345 277 25 349
Total assets 67 520 58 554 15 62 945
Liabilities
Loans and deposits at amortised cost 51 384 45 042 14 47 940
Other liabilities 1 453 1 068 36 1 238
Provisions 64 67 (4) 108
Total liabilities 52 901 46 177 15 49 286
Equity
Ordinary share capital and premium 5 649 5 649 5 649
Cash flow hedge reserve 23 36 (36) 64
Retained earnings 8 773 6 501 35 7 772
Share capital and reserves attributable to ordinary shareholders 14 445 12 186 19 13 485
Non-redeemable, non-cumulative, non-participating preference share capital
and premium 174 191 (9) 174
Total equity 14 619 12 377 18 13 659
Total equity and liabilities 67 520 58 554 15 62 945
Unaudited Unaudited Audited
Six months Six months Year
ended ended Six months ended
August August August February
2016/
2016 2015 2015 2016
Condensed consolidated income statement R'm R'm % R'm
Interest income 7 017 6 040 16 12 475
Interest expense (1 708) (1 372) 24 (2 884)
Net interest income 5 309 4 668 14 9 591
Loan fee income 910 732 24 1 545
Loan fee expense (400) (332) 20 (690)
Transaction fee income 2 602 2 013 29 4 326
Transaction fee expense (751) (599) 25 (1 306)
Net fee income 2 361 1 814 30 3 875
Net impairment charge on loans and advances to clients (2 600) (2 113) 23 (4 401)
Net movement in financial instruments held at fair value through profit or loss – (3) (1)
Income from operations 5 070 4 366 16 9 064
Operating expenses (2 626) (2 315) 13 (4 591)
Operating profit before tax 2 444 2 051 19 4 473
Income tax expense (685) (575) 19 (1 245)
Profit for the period 1 759 1 476 19 3 228
Earnings per share (cents)
Basic 1 514 1 270 19 2 779
Diluted 1 508 1 265 19 2 773
Unaudited Unaudited Audited
Six months Six months Year
ended ended Six months ended
August August August February
2016/
2016 2015 2015 2016
R'm R'm % R'm
Condensed consolidated statement of
comprehensive income
Profit for the period 1 759 1 476 19 3 228
Cash flow hedge recognised during the year (73) 52 (240) 189
Cash flow hedge reclassified to profit and loss for the year 18 (13) (238) (111)
Cash flow hedge before tax (55) 39 (241) 78
Income tax relating to cash flow hedge 14 (11) (227) (21)
Other comprehensive income for the period net of tax (41) 28 (246) 57
Total comprehensive income for the period 1 718 1 504 14 3 285
Unaudited Unaudited Audited
Six months Six months Year
ended ended Six months ended
August August August February
2016/
2016 2015 2015 2016
Reconciliation of attributable earnings to R'm R'm % R'm
headline earnings
Net profit attributable to equity holders 1 759 1 476 19 3 228
Preference dividend (8) (9) (16)
Discount on repurchase of preference shares – 1 1
Net profit after tax attributable to ordinary shareholders 1 751 1 468 19 3 213
Non-headline items:
Profit on disposal of property and equipment 6 2 (11)
Income tax charge - property and equipment (2) (1) 3
Loss on scrapping of intangible assets (1) – 23
Income tax charge - intangible assets – – (6)
Headline earnings 1 754 1 469 19 3 222
Unaudited Unaudited
Six months Six months Audited Year
ended ended Six months ended
August August August February
2016/
Condensed consolidated statement of 2016 2015 2015 2016
cash flows R'm R'm % R'm
Cash flow from operations 4 798 4 712 2 8 446
Income taxes paid (711) (598) 19 (1 298)
Cash flow from operating activities 4 087 4 114 (1) 7 148
Purchase of property and equipment (475) (268) 77 (580)
Proceeds from disposal of property and equipment 9 – 23
Purchase of intangible assets (237) (39) (124)
Investment in term deposit investments (3 649) (6 056) (40) (8 183)
Redemption of term deposit investments 3 797 3 646 6 773
Acquisition of investments designated at amortised cost – (2 639) –
Acquisition of held-to-maturity investments (4 686) – (4 182)
Redemption of held-to-maturity investments 2 971 – 547
Acquisition of available-for-sale financial assets (100) – –
Acquisition of investments at fair value through profit or loss and money
market unit trusts 4 (1) (89)
Disposal of investments at fair value through profit or loss and money
market unit trusts – 1 212 2 747
Cash flow from investing activities (2 366) (4 145) (43) (3 068)
Dividends paid (794) (691) 15 (1 132)
Preference shares redeemed – (15) (32)
Realised loss on settlement of employee share options less participants'
contributions 2 (13) (68)
Cash flow from financing activities (792) (719) 10 (1 232)
Net increase/(decrease) in cash and cash equivalents 929 (750) 2 848
Cash and cash equivalents at the beginning of the period 14 152 11 304 25 11 304
Cash and cash equivalents at the end of the period 15 081 10 554 43 14 152
Unaudited Unaudited Audited
Six months Six months Year
ended ended Six months ended
August August August February
2016/
2016 2015 2015 2016
Condensed consolidated statement of R'm R'm % R'm
changes in equity
Equity at the beginning of the period 13 659 11 564 18 11 564
Total comprehensive income for the period 1 718 1 504 14 3 285
Ordinary dividend (786) (682) 15 (1 116)
Preference dividend (8) (9) (16)
Employee share option scheme:
Value of employee services 20 11 82 23
Shares issued and acquired for employee share options at cost – (14) (101)
Proceeds on settlement of employee share options 2 1 33
Tax effect on share options 14 17 (18) 19
Non-redeemable, non-cumulative, non-participating preference shares
repurchased – (15) (32)
Equity at the end of the period 14 619 12 377 18 13 659
Unaudited Unaudited Audited
Six months Six months Year
ended ended Six months ended
August August August February
2016/
2016 2015 2015 2016
Commitments R'm R'm % R'm
Capital commitments approved by the board
Contracted for:
Property and equipment 245 70 347
Intangible assets 54 8 24
Not contracted for:
Property and equipment 461 297 55 702
Intangible assets 183 117 56 467
Property and other operating lease commitments
Future aggregate minimum lease payments
Within one year 394 324 22 355
From one to five years 1 209 909 33 1 071
After five years 300 264 14 279
Total future cash flows 1 903 1 497 27 1 705
Straight-lining accrued (103) (76) 36 (89)
Future expenses 1 800 1 421 27 1 616
Segment analysis
Capitec reports a single segment – retail banking, operating only within the South African economic
environment. The business is widely distributed with no reliance on any major customers. The business sells a
single retail banking product 'Global One' that enables clients to transact, save and borrow.
Fair values
In terms of IFRS 13 'Fair value measurement', the fair value of loans and advances was R43.3 billion (August
2015: R39.4 billion), deposits and bonds was R51.6 billion (August 2015: R45.2 billion) and derivatives were
valued at R142.6 million asset and R17 million liability (August 2015: R103.6 million asset). The fair value of loans
and advances was calculated on a level 3 basis and deposits and bonds and derivative assets were calculated
on a level 2 basis. Investments designated at fair value are valued using the market approach on a level 2 basis.
The fair value of all other financial instruments equates to their carrying amount.
Unaudited interim financial statements
The condensed consolidated interim financial statements were prepared in accordance with International
Accounting Standard (IAS) 34 'Interim Financial Reporting', the SAICA Financial Reporting Guides as issued
by the Accounting Practices Committee, Financial Pronouncements as issued by the Financial Reporting
Standards Council and the requirements of the Companies Act of South Africa, as amended. The accounting
policies applied in the preparation of these interim financial statements are in terms of International Financial
Reporting Standards and are consistent with those applied in the previous consolidated annual financial
statements except for standards, interpretations and amendments to published standards, applied for the first
time during the current financial period, which did not have any impact on the financial statements. The Group
complies in all material respects with the requirements of King III. Basel disclosures in terms of Regulation
43 of the Banks' Act are available on the Capitec Bank website.
No event, that is material to the financial affairs of the Group, has occurred between the reporting date and the
date of approval of the condensed consolidated interim financial statements.
The preparation of the condensed consolidated interim financial statements was supervised by the chief financial
officer, André du Plessis CA(SA).
On behalf of the board
Riaan Stassen Gerrie Fourie
Chairman Chief executive officer
Stellenbosch
27 September 2016
Company secretary and registered office
Yolande Mouton, M.Sc
1 Quantum Street, Techno Park, Stellenbosch 7600; PO Box 12451, Die Boord, Stellenbosch 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
R Stassen (Chairman), GM Fourie (CEO)*, AP du Plessis (CFO)*, MS du P le Roux, NS Mashiya*, JD McKenzie,
NS Mjoli-Mncube, PJ Mouton, CA Otto, JP Verster
* Executive
capitecbank.co.za
enquiries@capitecbank.co.za
Date: 27/09/2016 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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