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Summarised Audited Financial Statements For The Year Ended 28 February 2017
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')
Summarised audited financial statements
for the year ended 28 February 2017
Headline earnings per share up 18% to 3 281 cents
Headline earnings up 18% to R3.8 billion
Total dividend per share up 18% to 1 250 cents
Return on equity: 27%
Active clients: 8.6 million
2017/ Change %
Key performance indicators 2017 2016 2016 2015
PROFITABILITY
Interest income R'm 14 934 13 413* 11 11 487*
Loan fee income R'm 1 137 607* 87 542*
Total lending and investment income R'm 16 071 14 020 15 12 029
Interest expense R'm (3 552) (2 884) 23 (2 426)
Loan fee expense R'm (642) (690) (7) (627)
Total lending and investment expenses R'm (4 194) (3 574) 17 (3 053)
Net lending and investment income R'm 11 877 10 446 14 8 976
Net transaction fee income R'm 3 923 3 020 30 2 608
Other income R'm - (1) 22
Income from operations R'm 15 800 13 465 17 11 606
Net loan impairment expense R'm (5 121) (4 401) 16 (4 014)
Net income R'm 10 679 9 064 18 7 592
Operating expenses R'm (5 439) (4 591) 18 (4 031)
Non-banking operations R'm - - (1)
Income before tax R'm 5 240 4 473 17 3 560
Tax R'm (1 434) (1 244) 15 (995)
Preference dividend R'm (16) (16) (18)
Earnings attributable to ordinary shareholders
Basic R'm 3 790 3 213 18 2 547
Headline R'm 3 793 3 222 18 2 547
Net transaction fee to net income % 37 33 34
Net transaction fee to operating expenses % 72 66 65
Cost-to-income ratio % 34 34 35
Return on ordinary shareholders equity % 27 27 25
Earnings per share
Attributable cents 3 278 2 779 18 2 209
Headline cents 3 281 2 787 18 2 209
Diluted attributable cents 3 267 2 773 18 2 206
Diluted headline cents 3 270 2 781 18 2 206
Dividends per share
Interim cents 450 375 20 246
Final cents 800 680 18 590
Total cents 1 250 1 055 18 836
Dividend cover x 2.6 2.6 2.6
ASSETS
Net loans and advances R'm 39 205 35 760 10 32 484
Cash, cash equivalents and other liquid assets R'm 30 605 24 989 22 19 755
Other R'm 3 548 2 196 62 1 678
Total assets R'm 73 358 62 945 17 53 917
LIABILITIES
Deposits and bonds R'm 55 582 47 940 16 41 181
Other R'm 1 658 1 346 23 1 172
Total liabilities R'm 57 240 49 286 16 42 353
EQUITY
Shareholders' funds R'm 16 118 13 659 18 11 564
Capital adequacy ratio % 34 35 36
Net asset value per ordinary share cents 13 809 11 663 18 9 822
Share price cents 72 500 47 400 53 41 000
Market capitalisation R'm 83 830 54 807 53 47 407
Number of shares in issue '000 115 627 115 627 115 627
Share options
Number outstanding '000 963 868 11 710
Number outstanding to shares in issue % 0.8 0.8 0.6
Average strike price cents 31 755 28 520 11 19 403
Average time to maturity months 20 27 28
OPERATIONS
Branches 796 720 11 668
Employees 13 069 11 440 14 10 261
Active clients '000 8 569 7 269 18 6 244
ATMs
Own 1 653 1 236 34 941
Partnership 2 371 2 469 (4) 2 477
Total 4 024 3 705 9 3 418
Capital expenditure R'm 1 000 704 42 414
SALES
Loans
Value of loans advanced R'm 27 226 24 228 12 19 417
Number of loans advanced '000 3 508 3 684 (5) 2 820
Average loan amount R 7 761 6 577 18 6 887
Average loan amount less than or equal to 6 months R 1 905 1 749 9 1 668
Average loan amount greater than 6 months R 26 605 25 229 5 27 441
Repayments R'm 32 983 28 689 15 23 787
Gross loans and advances R'm 45 135 40 891 10 36 341
Loans past due (arrears) R'm 2 855 2 297 24 1 964
Arrears to gross loans and advances % 6.3 5.6 5.4
Arrears rescheduled within 6 months R'm 1 583 1 542 3 883
Arrears and arrears rescheduled within 6 months to gross
loans and advances % 9.8 9.4 7.8
Rescheduled from current within 6 months R'm 1 088 1 818 (40) 1 130
Arrears and all rescheduled within 6 months to gross
loans and advances % 12.2 13.8 10.9
Provision for doubtful debts R'm 5 930 5 131 16 3 857
Provision for doubtful debts to gross loans and advances % 13.1 12.5 10.6
Arrears coverage ratio % 208 223 196
Arrears and arrears rescheduled within 6 months
coverage ratio % 134 134 135
Arrears and all rescheduled within 6 months coverage
ratio % 107 91 97
Total lending income (excluding investment income) R'm 14 362 12 837 12 11 287
Total lending income (excluding investment income) to
average gross loans and advances % 33.4 33.2 32.2
Gross loan impairment expense R'm 6 246 5 255 19 4 616
Recoveries R'm 1 125 854 32 602
Net loan impairment expense R'm 5 121 4 401 16 4 014
Net loan impairment expense to total lending income
(excluding investment income) % 35.7 34.3 35.6
Net loan impairment expense to average gross loans
and advances % 11.9 11.4 11.5
Deposits and bonds
Wholesale deposits R'm 7 543 10 154 (26) 11 152
Retail call savings R'm 30 117 24 152 25 19 298
Retail fixed-term savings R'm 17 922 13 634 31 10 731
* Loan origination fees previously included in loan fee income was restated and included in interest income of the Income statement.
Client growth motivated by strong service and brand fundamentals
The Capitec brand has consistently stayed true to its core fundamentals of delivering simplified banking that
is both affordable and easy to access through personal service. This resonates with most South Africans,
especially in the current tough economic climate, giving them a sense of value and allowing them to feel in
control of their money. We received recognition of this when the brand was awarded the top position in the
retail banking category at the Sunday Times Top Brands Awards in August 2016.
Substantial Capitec brand acceptance, combined with the expansion of our branch, ATM and digital footprint,
has resulted in a record growth of 1 300 000 new clients during the financial year and active clients totalled
8.6 million by year-end (February 2016: 7.3 million).
Primary banking clients (those clients who make regular deposits - mainly salaries) grew in line with total
client growth and represent 46% of all active clients. These primary banking clients are less likely to move
their banking elsewhere and, on average, do 5 times more transactions than a regular banking client.
Helping clients to help themselves
Our strategy of increasing out-of-branch transacting continued to deliver strong results. Our clients are able
to perform more cost efficient transactions through our self-service terminals ('SST'), remote banking app
('app'), USSD and dual note recyclers ('DNR'). A DNR is where you can deposit and withdraw money, as well
as get a bank statement.
Self-service banking transactions (including app, USSD, card, SSTs, DNRs and internet banking) increased
46% year-on-year to 728 million (February 2016: 499 million), while ATM and branch transactions increased
15% year-on-year to 330 million (February 2016: 287 million). As a direct result, our capacity in the branches
improved and we were able to service our clients' needs faster and more efficiently.
Client centricity delivered through service
A core principle in the organisation is to act with the best interest of the client in mind. This emphasises
the importance of the client experience, which is driven primarily by consistent client service that meets or
exceeds expectations. We opened 76 new branches during the financial year in order to alleviate pressure
in high volume areas and to grow the brand footprint in higher-end shopping malls. 301 of the 796 branches
trade seven days a week and all branches are open for longer trading hours than the industry norm to ensure
a highest level of client accessibility.
We are pleased once more by the recognition the organisation received for client service as the winner of the
Ask Afrika Orange Index service awards in 2016, as well as the South African Consumer Satisfaction Index
(SACsi) award for the top retail bank. This is however a constant reminder to continue to focus on developing
and delivering a world class service experience that helps clients to feel in control of their money.
Earnings up 18%
Earnings increased by 18% to R3.8 billion from R3.2 billion a year ago. Despite weak economic conditions,
there was strong year-on-year growth in net transaction fee income. Net lending and investment income
increased by 14%, with a 16% increase in net loan impairment expense.
Net transaction fee income increased by 30%
The combination of the growth in our active client base, expansion of our ATM and branch network and the
increasing financial awareness of our clients on the best way to bank, has resulted in a 30% year-on-year
increase in net transaction (non-lending) fee income.
Our net transaction fee income covered 72% (February 2016: 66%) of our operating expenses and contributed
37% (February 2016: 33%) of our net income.
Operating costs increased by 18%
Operating costs increased by 18% from R4.6 billion in 2016 to R5.4 billion in 2017. The cost-to-income ratio
remained at 34% for 2017 (February 2016: 34%). The main reasons for the growth in expenses were, firstly,
the continued increase in the number of employees and branches. Employment costs grew year-on-year by
21% or R421 million and the cost of premises grew by 18% or R76 million, as we opened new branches during
the year. Secondly, IT and security costs increased significantly.
Capital expenditure for the year was R1 billion (February 2016: R704 million). The 42% year-on-year increase
was mainly due to the expansion of our ATM and branch network, as well as spend on IT.
Expenditure on our staff, branch and ATM network and IT systems are critical to ensuring we continue to
deliver simple and affordable financial services to our clients in an easily accessible way that is accompanied
by excellent service.
Graduate placement program, learnerships and bursaries
This year saw the launching of two new further development programs for both current and future employees.
Firstly, we introduced a one year learnership program (NQF4 equivalent) for staff in branches and service
centres, whereby on completion they receive a certificate in banking. Secondly, we began a graduate placement
program with seven new joiners starting this year. In addition, we provided 29 bursaries to second year university
students studying finance and information technology ('IT'). These investments ensure our employees and
future employees have the opportunity to further educate themselves and that our talent pipeline is well placed
for the future growth of the company.
Leadership and staff development is important to us. 1 313 employees attended leadership courses during
the financial year, while 3 915 employees participated in specific training courses. This investment in our
employees will enable us to perform more effectively as a company and retain our talented leaders.
We also contributed to the Ikusasa Student Financial Aid Programme ('ISFAP') during the year. ISFAP is a
pilot program, backed by government and the private sector, aimed at addressing the funding challenge of
tertiary education of poor and 'missing middle' students.
Gross loans and advances increased by 10%
Gross loans and advances increased by R4.2 billion to R45.1 billion (February 2016: R40.9 billion). The impact of
continued tightening of our credit granting criteria and lending to better quality clients was evident, as we granted
176 655 less loans in 2017 than in the previous year (February 2017: 3 507 819; February 2016: 3 684 474).
We granted lower-risk, higher value loans to better quality clients this year. This resulted in the value of
new loans growing by 12% from R24.2 billion in 2016 to R27.2 billion in 2017. The average amount for
loans less than 6 months and greater than 6 months was R1 905 (February 2016: R1 749) and R26 605
(February 2016: R25 229) respectively.
The average term of the outstanding book decreased from 40 months at February 2016 to 38 months at
February 2017.
The launch of the Capitec credit card
The Capitec credit card was launched on 18 September 2016 in the Western Cape branches and nationally
on 16 October 2016. So far, it has performed within our risk appetite. Clients earn interest of at least 5.35% per
year on a positive balance.
Arrears as a percentage of gross loans and advances increased to 6.3%
The financial stress and economic difficulties experienced by clients during the year were evident. Debt review
applications and retrenchment letters received increased by 19% and 15% respectively year-on-year. There
was also an increase in clients who received their salaries late or experienced reduced or no inflows.
Management acted decisively to address the deteriorating arrears performance during the year by tightening
credit granting to those segments and employers indicating financial stress. Significant changes were also
implemented to the rescheduling policies. This ensures the performance and quality of the loan book remains
within our risk appetite, while resulting in all rescheduled loans within the last 6 months to decrease year-on-year
by 21% to R2.7 billion (February 2016: R3.4 billion).
The economic conditions and changes in rescheduling policies contributed to the 24% year-on-year increase in
arrears to R2.9 billion (February 2016: R2.3 billion). Arrears and all rescheduled loans within the last 6 months
to gross loans and advances decreased to 12.2% (February 2016: 13.8%), while the arrears and all rescheduled
loans within the last 6 months coverage ratio increased to 107% (February 2016: 91%).
Rescheduled accounts
The performance of rescheduled accounts are monitored on a daily basis. Loans that were rescheduled from
arrears within the last 6 months increased by 3% year-on-year to R1.6 billion (February 2016: R1.5 billion).
We implemented rules to prevent arrears clients from rescheduling for a second or third time if their risk was
too high. Loans rescheduled within the last 6 months of the year from a current status decreased by 40%
to R1.1 billion (February 2016: R1.8 billion). This was due to policy changes that included preventing low risk
clients from rescheduling out of a current status.
Higher provisions were maintained for the rescheduled book in comparison to the remainder of the book.
Provisioning remains conservative and adequate
The total provisions compared to gross loans and advances increased to 13.1% at the end of the 2017 financial
year (February 2016: 12.5%).
We provide 8% on current loans, 43% on loans one instalment behind, 81% for two instalments and 92%
for three instalments, all statistically calculated. We provide on average 52% on clients that rescheduled any
of their loans whilst in arrears within the last 6 months even though they are current in terms of their new
agreement. For clients who rescheduled any of their loans whilst current we provide 15%. All provisions are
based on the probability of default. All outstanding balances of clients who are 90 days in arrears on any loan
are substantially provided for or written off.
The gross loan impairment expense increased by 19% to R6.2 billion (February 2016: R5.3 billion). The table
below analyses this increase:
Change %
2017/
R'm 2017 2016 2016 2015
Write-offs 5 447 3 981 37 4 395
Movement in bad debt provision 799 1 274 (37) 221
Gross loan impairment expense 6 246 5 255 19 4 616
A significant portion of the 37% increase in write-offs was as a result of the change in rescheduling policies in
the current year and the market deterioration of the prior year, which was provided for in 2016, that materialised
in the current year. The market deterioration of the prior year, which increased the 2016 movement in bad
debt provision, did not occur again in the current year. The tightening of the granting criteria and a more stable
market resulted in a lower bad debt provision movement during the 2017 financial year.
Our net loan impairment expense to total lending income (excluding investment income) for the year amounted
to 35.7% (February 2016: 34.3%). The net loan impairment expense to average gross loans and advances
increased from 11.4% in 2016 to 11.9% this year.
A weak employment environment was prevalent during the year. We managed our book meticulously and
restricted our lending to specific sectors and employers where we anticipated increased stress. The book
continues to perform within our risk appetite.
Recoveries
Recoveries increased by 32% year-on-year from R854 million in 2016 to R1 125 million in 2017. The increase
resulted from operational debt recovery improvements, a larger handover book and debt sales.
Continued healthy capital levels
The return on equity for the year was 27% (February 2016: 27%). The total annual dividend increased by 18%
from 1 055 cents per share to 1 250 cents per share, in line with the increase in earnings.
Capitec remains well capitalised and is generating sufficient profit to fund growth in the loan book. At February
2017, the capital adequacy ratio was 34%.
Growth of deposits
Retail deposits amounted to R48.0 billion at February 2017, an increase of R10.2 billion on the prior year-end
(February 2016: R37.8 billion). Retail deposits continued to grow by more than total loans and advances.
The value of wholesale deposits declined to R7.5 billion (February 2016: R10.2 billion). This is as result of
managing our wholesale funding to meet the requirements of the loan book, matched against growth in retail
fixed deposits and profit.
Capitec is fully compliant with the Basel 3 liquidity ratios. Our conservative liquidity policies are unchanged.
Credit regulation
The Department of Trade and Industry ('DTI') published final Credit Life Insurance Regulations under the
National Credit Act on 9 February 2017. The regulations prescribe the cost, cover and benefits of credit life
insurance. The regulations will come into effect on 10 August 2017 and will only affect credit agreements
concluded on or after the date of implementation. We are working towards implementing the regulations by
the effective date.
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. We are supporting the regulator on these matters.
Prospects
We continue to grow our client numbers, branches and ATM network. This will provide us with the opportunity to
offer new financial services in the future. New products will continue to have the same foundation of simplicity
and affordability as our other products.
Our strategy to increase self-service and digital banking will result in improved capacity and efficiencies in
the branches.
On 24 March 2017, we announced our investment in Cream Finance Holding Limited ('Creamfinance').
Creamfinance is a leading online technology-driven consumer loans company, offering multiple credit products
across international markets. We will acquire an interest of 40% for �21 million in three tranches at nine-month
intervals, subject to specific agreed performance measures being met. We are excited about this investment
and the opportunities it presents for us as we expand our interests beyond the borders of South Africa.
We continue to pursue our strategy to be the best retail bank.
Dividend
The directors declared a final gross dividend of 800 cents per ordinary share on 27 March 2017, bringing
the total dividends for the year to 1 250 cents per share. There are 115 626 991 ordinary shares in issue.
The final 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 20% is 640.00000 cents per share. The distribution is made
from income reserves. Capitec's tax reference number is 9405376840.
Last day to trade cum dividend Tuesday, 18 April 2017
Trading ex-dividend commences Wednesday, 19 April 2017
Record date Friday, 21 April 2017
Payment date Monday, 24 April 2017
Share certificates may not be dematerialised or rematerialised from Wednesday, 19 April 2017 to Friday,
21 April 2017, both days inclusive.
The chief financial officer's review is available at http://www.capitecbank.co.za.
On behalf of the board
Riaan Stassen Gerrie Fourie
Chairman Chief executive officer
Stellenbosch
28 March 2017
Audited Audited
February February
2017 2016
Summarised consolidated statement of financial position R'm R'm
Assets
Cash, cash equivalents and money market funds 18 677 14 165
Held-to-maturity investments 5 327 3 635
Term deposit investments 6 601 7 189
Loans and advances to clients 39 205 35 760
Other receivables 1 127 216
Derivative assets 58 225
Available-for-sale financial assets 100 -
Current income tax asset - 53
Property and equipment 1 523 1 110
Intangibles 280 243
Deferred income tax asset 460 349
Total assets 73 358 62 945
Liabilities
Deposits and bonds 55 582 47 940
Derivative liabilities 46 -
Other liabilities 1 501 1 238
Current income tax liability 30 -
Provisions 81 108
Total liabilities 57 240 49 286
Equity
Ordinary share capital and premium 5 649 5 649
Cash flow hedge reserve (12) 64
Retained earnings 10 330 7 772
Share capital and reserves attributable to ordinary shareholders 15 967 13 485
Non-redeemable, non-cumulative, non-participating preference share capital and premium 151 174
Total equity 16 118 13 659
Total equity and liabilities 73 358 62 945
Audited
Audited February
February Restated
2017 2016
Summarised consolidated income statement R'm R'm
Lending and investment income 16 071 14 019
Interest income 14 934 13 412*
Loan fee income 1 137 607*
Lending and investment expenses (4 194) (3 574)
Interest expense (3 552) (2 884)
Loan fee expense (642) (690)
Net lending and investment income 11 877 10 445
Transaction fee income 5 499 4 326
Transaction fee expense (1 576) (1 306)
Net transaction income 3 923 3 020
Net impairment charge on loans and advances to clients (5 121) (4 401)
Net movement in financial instruments held at fair value through profit or loss - (1)
Net income 10 679 9 063
Operating expenses (5 439) (4 591)
Operating profit before tax 5 240 4 472
Income tax expense (1 434) (1 244)
Profit for the year 3 806 3 228
Earnings per share (cents)
- Basic 3 278 2 779
- Diluted 3 267 2 773
* Loan origination fees previously included in loan fee income was restated and included in interest income of the Income statement.
Audited Audited
February February
2017 2016
Summarised consolidated statement of comprehensive income R'm R'm
Profit for the period 3 806 3 228
Cash flow hedge recognised during the year (212) 189
Cash flow hedge reclassified to profit and loss for the year 108 (111)
Total movement in cash flow hedge before tax (104) 78
Income tax relating to cash flow hedge 28 (21)
Other comprehensive income for the period net of tax (76) 57
Total comprehensive income for the period 3 730 3 285
Audited Audited
February February
2017 2016
Reconciliation of attributable earning to headline earnings R'm R'm
Net profit attributable to equity holders 3 806 3 228
Preference dividend (16) (16)
Discount on repurchase of preference shares (1) 1
Net profit after tax attributable to ordinary shareholders 3 789 3 213
Non-headline items:
Loss/(profit) on disposal of property and equipment 4 (11)
Income tax charge - property and equipment (1) 3
Loss on scrapping of intangible assets 1 23
Income tax charge - intangible assets - (6)
Headline earnings 3 793 3 222
Audited
Audited February
February Restated
2017 2016
Summarised consolidated statement of cash flows R'm R'm
Cash flow from operating activities
Cash flow from operations 10 890 8 985*
Income taxes paid (1 388) (1 298)
9 502 7 687
Cash flow from investing activities
Purchase of property and equipment (783) (580)
Proceeds from disposal of property and equipment 9 23
Purchase of intangible assets (217) (124)
Investment in term deposit investments (7 011) (8 182)
Redemption of term deposit investments 7 599 6 773
Acquisition of held-to-maturity investments (7 620) (4 182)
Redemption of held-to-maturity investments 5 928 547
Acquisition of available-for-sale financial assets (100) -
Acquisition of investments at fair value through profit or loss and money market unit trusts 6 (89)
Disposal of investments at fair value through profit or loss and money market unit trusts - 2 747
(2 189) (3 067)
Cash flow from financing activities
Dividends paid (1 323) (1 132)
Preference shares repurchase (24) (32)
Issue of institutional bonds and other funding 774 1 006*
Redemption of institutional bond and other funding (2 208) (1 546)*
Realised loss on settlement of employee share options less participants' contributions (14) (68)
(2 795) (1 772)
Net increase in cash and cash equivalents 4 518 2 848
Cash and cash equivalents at the beginning of the year 14 152 11 304
Cash and cash equivalents at the end of the year 18 670 14 152
* Wholesale funding (subordinated debt and listed bonds) previously included as cash from operations was restated and included as part of
financing activities of the cash flow statement.
Audited Audited
February February
2017 2016
Summarised consolidated statement of changes in equity R'm R'm
Equity at the beginning of the period 13 659 11 564
Total comprehensive income for the period 3 731 3 285
Ordinary dividend (1 307) (1 116)
Preference dividend (16) (16)
Employee share option scheme:
Value of employee services 42 23
Shares acquired for employee share options at cost (27) (101)
Proceeds on settlement of employee share options 13 33
Tax effect on share options 47 19
Preference shares repurchased (24) (32)
Equity at the end of the period 16 118 13 659
Audited Audited
February February
2017 2016
Commitments R'm R'm
Capital commitments-approved by the board
Contracted for:
Property and equipment 196 347
Intangible assets 36 24
Not contracted for:
Property and equipment 924 702
Intangible assets 393 467
Property and other operating lease commitments
Future aggregate minimum lease payments
Within one year 422 354
From one to five years 1 244 1 072
After five years 298 279
Total future cash flows 1 964 1 705
Straight-lining accrued (114) (89)
Future expenses 1 850 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 R43.2 billion
(February 2016: R38.2 billion), deposits and bonds was R55.9 billion (February 2016: R48.1 billion), derivative
assets was R58.1 million (February 2016: R225.4 million asset), available-for-sale investment was R100 million
(February 2016: nil) and derivative liabilities was R45.6 million (February 2016: nil). The fair value of loans
and advances and available-for-sale investment was calculated on a level 3 basis and deposits and bonds
and derivative assets and liabilities were calculated on a level 2 basis. The fair value of all other financial
instruments equates their carrying amount.
Notes
The summarised consolidated financial statements are prepared in accordance with the JSE Limited Listings
Requirements for preliminary reports and the requirements of the Companies Act applicable to summarised
financial statements. The Listings Requirements require preliminary reports to be prepared in accordance
with the framework concepts and the measurement and recognition requirements of International Financial
Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the Accounting Practices
Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as
a minimum, contain the information required by IAS 34 'Interim Financial Reporting'. The accounting policies
applied in the preparation of the consolidated financial statements from which the summarised consolidated
financial statements were derived are in terms of IFRS and are consistent with those accounting policies applied
in the preparation of the previous consolidated annual financial statements. All other standards, interpretations
and amendments to published standards applied for the first time during the current financial period did not
have any significant impact on the financial statements.
As part of the review of the group's basis of preparation policy to consistently comply with IFRS and interpretations
issued by the IFRS Interpretation Committee (IFRIC), we have reclassified loan origation fees to be included
in interest income and not form part of loan fee income as previously presented.
The portion of loan origination fees that relate to the creation of a financial asset are amortised over the term
of the loan on an effective interest rate basis, with the unamortised portion of the fees recorded as deferred
loan fee income contained within net loans and advances to clients.
The impact of this reclassification for 2016 is presented as follows:
Restated Reported
2016 previously Impact
R'm R'm R'm
Total interest income 13 413 12 475 938
Total loan fee income 607 1 545 (938)
Total lending and investment income 14 020 14 020 -
As part of the JSE proactive monitoring of financial statements, issuers were advised that classification of an
item within the statement of cash flows, i.e. whether it relates to operating, financing, or investing activities, is
equally important to users as the final net cash position. For this purpose, during the past year we have split
the funding of our deposits and wholesale funding to reclassify the movement of bonds (subordinated debt
and listed bonds) under financing activities and not under operating activities as previously disclosed.
The impact of this reclassification is presented as follows:
Restated Reported
2016 previously Impact
R'm R'm R'm
Cash flow from operations 8 985 8 445 540
Cash flow from financing activities (1 772) (1 232) (540)
Net increase in cash and cash equivalents 7 213 7 213 -
The preparation of the summarised audited consolidated financial statements was supervised by the chief
financial officer, Andr� du Plessis, CA(SA).
Independent auditor's opinion
These summarised consolidated financial statements for the year ended 28 February 2017 have been audited
by PricewaterhouseCoopers Inc., who expressed an unmodified opinion thereon. The auditor also expressed
an unmodified opinion on the annual financial statements from which these summarised consolidated financial
statements were derived.
A copy of the auditor's report on the summarised consolidated financial statements and of the auditor's report
on the annual consolidated financial statements are available for inspection at the company's registered office,
together with the financial statements identified in the respective auditor's reports.
The auditor's report does not necessarily report on all of the information contained in this announcement/financial
results. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the
auditor's engagement they should obtain a copy of the auditor's report together with the accompanying financial
information from the company's registered office. The directors take full responsibility for the preparation of
the report and that the financial information has been correctly extracted from the underlying annual financial
statements.
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)
Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196; 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 (Exec: Risk Management)*
JD McKenzie, NS Mjoli-Mncube, PJ Mouton, CA Otto, JP Verster
* Executive
Annual General Meeting
Notice is hereby given that the annual general meeting of the shareholders of
Capitec will be held on Friday, 26 May 2017. The detailed notice will be available from
26 April 2017 at http://www.capitecbank.co.za/investor-relations/shareholders-centre.
capitecbank.co.za
enquiries@capitecbank.co.za
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