CAPITEC BANK HOLDINGS LIMITED - General Statement

General Statement

Capitec Bank Holdings Limited
Incorporated in the Republic of South Africa
Registration number 1999/025903/06
Registered bank controlling company
Ordinary Share Code: CPI ISIN Number: ZAE000035861
Preference Share Code: CPIP ISIN Number: ZAE000083838
("Capitec")

Capitec Bank Limited
Incorporated in the Republic of South Africa
Registration No. 1980/003695/06
Registered bank
Company code: BICAP
Stock Code: CBL22
ISIN Code: ZAG000105305
Stock Code: CBL24
ISIN Code: ZAG000130881
Stock Code: CBL26
ISIN Code: ZAG000136128
Stock Code: CBL27
ISIN Code: ZAG000143884
Stock Code: CBL28
ISIN Code: ZAG000151333
Stock Code: CBL29
ISIN Code: ZAG000158874
(“Capitec Bank” or “the bank”)

GENERAL STATEMENT

Shareholders are referred to the guidance provided in
Capitec’s trading statement published on the JSE Stock
Exchange News Service (“SENS”) on 6 March 2020 advising that
headline earnings per share and earnings per share are expected
to increase by between 18% and 21%. This guidance remains
unchanged and Capitec’s fundamental business remains strong.

Globally, markets are in economic turmoil due to the effects
of Covid-19, and many companies, including the banks, have
seen big declines in their share prices.

We believe that the sharp decline in the Capitec ordinary
share price since yesterday may be attributable to the
following technical reasons:
• International shareholders are impacted by the continued
   weakening of the Rand which, over and above the declining
   share price, further motivated the disposal of their
   Capitec shares.
• The algorithms applied by professional traders enforce
   disposal of a share when the price of that share declines
   below a certain limit.
•  Banks that are counterparties to collar transactions are
   inclined to sell the underlying share when contracted
   limits are breached.

There is speculation in the market that Capitec will be
severely impacted by Covid-19 due to the market on which it
focuses and its unsecured credit business model. Shareholders
are reminded of the following important features of Capitec’s
business model as highlighted in the FY2020 interim results
published on SENS on 26 September 2019:

1. Only 1.1 million of Capitec Bank’s 12.6 million active
   clients (9%) have credit with Capitec Bank.
2. Capitec’s business model is well diversified and income
   is strengthened by transaction fee income and funeral
   cover sales. Net transaction fee and funeral income
   contribute 46% of net income and covers 91% of operating
   expenses.
3. There has been a significant migration in Capitec Bank’s
   client base to the middle and higher income segment. 81%
   of credit granted in August 2019 was to clients with a
   gross salary of over R10 000 per month, and 47% to
   clients with a gross salary of over R20 000 per month.
4. The bank has a strong retail deposit base.

Capitec’s liquidity position as of today remains strong and
its liquidity ratios remain in line with that published on 12
December 2019 being:
- Capital Adequacy Ratio – 28.4%
- Liquidity Coverage Ratio – 1 444%
- Net Stable Funding Ratio – 186%
- Leverage Ratio – 16.6%
- Capitec Bank’s excess deposit base has grown by more than
  5% from 31 August 2019.

Management continuously assesses changes in the economy and
trading conditions and make appropriate adjustments to
business and granting models as required. This is particularly
relevant in these uncertain times.

Capitec’s full year results for the reporting period ended 29
February 2020 will be published on SENS on 14 April 2020 and
in the press on 15 April 2020.

19 March 2020
Stellenbosch

Sponsor: PSG Capital

Date: 19-03-2020 03:50:00
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.