Annual Results Presentation - Simplified Banking · Results Feb-16 Feb-17 Feb-16 Feb-17 Feb-16...
Transcript of Annual Results Presentation - Simplified Banking · Results Feb-16 Feb-17 Feb-16 Feb-17 Feb-16...
© Capitec Bank Limited 1
Annual Results
Presentation
28 February 2017
Contents
• Key indicators
• Economic overview
• Banking clients
• Client service
• Credit
• Funding
• International
• Future
© Capitec Bank Limited 3
Key indicators
Results © 2017 Capitec Bank 4
Key Indicators Headline earnings (R’millions)
2 017
1 173
2 547
1 469
3 222
1 754
3 793
-
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
2014 Aug-14 2015 Aug-15 2016 Aug-16 2017
Results © 2017 Capitec Bank 5
Key Indicators Return on equity (%)
23
25 25 26
27 26
27
0
5
10
15
20
25
30
2014 Aug-14 2015 Aug-15 2016 Aug-16 2017
Results © 2017 Capitec Bank 6
Key Indicators Cost-to-income ratio (%)
32
34
35
36
34 34 34
30
31
32
33
34
35
36
37
2014 Aug-14 2015 Aug-15 2016 Aug-16 2017
Results 7
Key Indicators Net transaction fee income to operating expenses (%)
© 2017 Capitec Bank
59 63
65 61
66 70
72
-
10
20
30
40
50
60
70
80
2014 Aug-14 2015 Aug-15 2016 Aug-16 2017
Results 8
Key Indicators Net transaction fee income to net income (%)
© 2017 Capitec Bank
32
34 34
32
33
37 37
29
30
31
32
33
34
35
36
37
38
2014 Aug-14 2015 Aug-15 2016 Aug-16 2017
Economic
Overview
Results 10
• Macro economy
• Retrenchments and debt review
• High inflation
• Cash availability
• Lower real income
© 2017 Capitec Bank
Economic Overview
Results 11
• Unexpected
• Volatility
© 2017 Capitec Bank
Economic Overview Macro economy
Results © 2017 Capitec Bank 12
Retrenchments and debt review
Economic Overview
-
400
800
1,200
1,600
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
YOY comparison - Retrenchment letters
FY2015
FY2016
FY2017
1,000
2,000
3,000
4,000
5,000
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
YOY comparison - Debt review
FY2015
FY2016
FY2017
Results © 2017 Capitec Bank 13
High inflation
Economic Overview
Inflation
(Consumer Price Index: All items vs. Food and non-alcoholic beverages
Source: Statistics South Africa CPI data
Note: June 2016 data unavailable from Stats SA (data shown is an average of May 2016 and July 2016)
Results 14
Economic Overview
© 2017 Capitec Bank
Cash availability Average account inflows per banking client (include no inflows): Inflation adjusted data
(August 2015 income groups, Aug 2015 – Feb 2017, n = 2.7 million)
Feb 2016
R 2 221 R 4 035
R 2 985 R 2 921 R 3 937
R 2 780
R 5 157
R 7 712
R 5 468 R 5 303 R 7 099
R 4 895
R 10 543
R 14 002
R 10 933 R 10 562
R 12 626
R 9 661
R 20 088
R 22 131
R 18 471 R 18 210 R 19 664
R 15 855
R -
R 5 000
R 10 000
R 15 000
R 20 000
R 25 000
Au
g-1
5
Se
p-1
5
Oct-
15
No
v-1
5
De
c-1
5
Jan
-16
Fe
b-1
6
Ma
r-1
6
Ap
r-16
Ma
y-1
6
Jun
-16
Jul-
16
Au
g-1
6
Se
p-1
6
Oct-
16
No
v-1
6
De
c-1
6
Jan
-17
Fe
b-1
7
R1 - R2,000 R3,501 - R7,500 R7,501 - R15,000 R15,001 - R30,000
Results
Feb-16 Feb-17 Feb-16 Feb-17 Feb-16 Feb-17
More than 40% cash available % 83 68 82 71 82 70
Between 39% and 21% cash available % 9 6 13 12 11 10
Cash stress less than 20% cash available % 8 5 5 7 7 6
No inflow % - 21 - 10 - 14
100 100 100 100 100 100
Totalless than R5 000 R5 001 plus
Feb-16 Feb-17 Feb-16 Feb-17 Feb-16 Feb-17
More than 40% cash available % 84 70 74 70 82 70
Between 39% and 21% cash available % 10 8 19 18 11 10
Cash stress less than 20% cash available % 6 6 7 8 7 6
No inflow % - 16 - 4 - 14
100 100 100 100 100 100
Non-Gov Gov Total
15
Economic Overview
535 802 performing clients with inflows from February 2016
© 2017 Capitec Bank
Lower real income
Banking
Clients
Results 17
Banking Clients
• Growing client base
• Opportunity in higher income segments
• Focus on quality
© 2017 Capitec Bank
Results 18
Banking Clients Growing client base
(‘000)
© 2017 Capitec Bank
Results 19
Banking Clients Opportunity in higher income segments Source: AMPS Dec -15
© 2017 Capitec Bank
Age 15-34 = 40% Age 15-34 = 54%
<R10,000
R10,000 – R30,000
>R30,000
25%
11%
2%
South Africa Income
Capitec market share
14,7m
4m
690 000
Results 20
Banking Clients Focus on quality
© 2017 Capitec Bank
Potential quality
• Earn money (salary, entrepreneurs, informal, allowance, social grant)
• Spend money (accommodation, electricity, transport, cellphone, groceries, education)
Capitec quality
Client Service
Results 22
Client Service
© 2017 Capitec Bank
• Distribution
• Self-service banking
• Service culture
• People
• Training
Results 23
Client Service Distribution
© 2017 Capitec Bank
301 branches open 7 days a week
Change
sinceTotal
Feb-16 Feb-17
Branches: Total 76 796
: New look 148 434
: Current (72) 362
ATMs :Total 319 4 024
: Regular 160 1 128
: Dual note recyclers 257 525
: Partnership (98) 2 371
Results © 2017 Capitec Bank 24
Client Service Self-Service banking
• USSD clients up to 5.4 million
• Banking app clients up to 1.8 million
• Free data while using app
• Self Service Terminals / Cash Accepting ATMs (DNR)
• More capacity in branches for new clients, credit
applications and better client service
• Lower fee income on self-help, higher volumes and
efficiency
Results 25
Client Service Self-Service banking - transaction volume
© 2017 Capitec Bank
0
10
20
30
40
50
60
70
80
90
Mill
ions
ATM/Branch/DNR (cash withdrawals) USSD/App/Card/Internet/SST
Results © 2017 Capitec Bank 26
Client Service Service Culture
• Client centric ethos
• Service and client satisfaction measurement
• Service recovery, systems improvement and behaviour training
• Accolades:
• SA’s favorite bank according to social media sentiment (BrandsEye)
• Top retail bank in South Africa Consumer Satisfaction Index (SACsi)
• Ask Afrika Orange Index Service award
• Brand finance top 10 most powerful international banking brands
Results © 2017 Capitec Bank 27
Client Service People
• Focus on client service and company values
• Recruit for potential and cultural fit, train for skill
• 1 629 new employees to 13 069
• 5 228 number of employees attending courses
Results © 2017 Capitec Bank 28
Client Service Training
9 056 10 353
1 182
10 066
6 129
11 284
2 931
11 316 10 291
17 914
4 168
13 283
Induction / On-boarding Functional & Technical Management & Leadership Compliance
Number of completed distance learning initiatives
2015 2016 2017
2 638
1 659 1 605 127
3 157
1 883 1 661 240
3 632 3 607
2 016 296
-
1 000
2 000
3 000
4 000
Induction / onboarding Functional / technical Management and leadership Compliance
Number of employees attending courses
2015 2016 2017
Credit
Results 30
• Regulatory
• Model criteria
• Loans advanced by term
• Collections / provisions
• Credit Card
© 2017 Capitec Bank
Credit
Results 31
Credit application (%)
Model criteria
Credit
© 2017 Capitec Bank
Nov-15 Nov-16
Applications # 318 443 410 692
Accept rate % 56 39
Taken up % 42 31
Taken up # 132 701 126 138
Results 32 © 2017 Capitec Bank
Credit Loans advanced by term
14% 15% 18% 16% 11% 10%
7% 9%
14% 16% 16%
14%
30% 27%
25% 25% 26%
26%
24% 30%
35% 34% 36%
34%
25% 20%
8% 9% 11% 13%
3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17
Credit facility and multi loan 1 - 12 month 13 - 36 month 47 - 60 month 61 - 84 month Credit Card
Results 33
Arrears & impairment provisions of gross loans & advances
Collections / provisions
Credit
© 2017 Capitec Bank
Feb-16 Feb-17
Gross loans and advances R'm 40 891 45 135
Loans past due (arrears) R'm 2 297 2 855
Arrears to gross loans and advances % 5.6 6.3
Arrears rescheduled < 6 months R'm 1 542 1 583
Arrears and arrears rescheduled < 6 months to gross loans and advances % 9.4 9.8
Rescheduled from current < 6 months R'm 1 818 1 088
Arrears and all rescheduled < 6 months to gross loans and advances % 13.8 12.2
Provision for doubtful debts R'm 5 131 5 930
Provision for doubtful debts to gross loans and advances % 12.5 13.1
Arrears coverage ratio % 223 208
Arrears and arrears rescheduled < 6 months coverage ratio % 134 134
Arrears and all rescheduled < 6 months coverage ratio % 91 107
Results 34
What makes it different
• Single card to access Global One
• 5.35% - 5.90% on positive balance
• Available in real time, active immediately
• Performance and growth expectations
© 2017 Capitec Bank
Credit Credit card
Funding
Results 36
• Well capitalised
• Consistent, well-priced, retail deposit growth –
fixed and call
• Compliance with all Basel 3 liquidity ratios
© 2017 Capitec Bank
Conservative capital and funding
Funding
Results 37
Funding Deposits (R’millions)
© 2017 Capitec Bank
-
5 000
10 000
15 000
20 000
25 000
30 000
35 000
2012 2013 2014 2015 2016 2017
Retail call Retail fixed Wholesale
International
Results 39
International
• Globally expanding online lending group
• Poland, Latvia, Georgia, the Czech Republic, Mexico and
Denmark
• Sophisticated technology and scoring
• Early stage with big potential
• Gain international and digital experience
• Provide strategic input
• Board of directors’ seats
Creamfinance
© 2017 Capitec Bank
Future
Results © 2017 Capitec Bank 41
Future Simplified Pricing
Free
• Pay by card
• Transfer between accounts
• Access app with free data
R1.50
• Cash at card machine
• Payments on app
• Send statements from app
R3.50
• Debit order
R5.00
• Payments and transfers in
branch
R6.00
• Cash at Capitec ATM
R8.50
• Cash at any other ATM in SA
(only R2.50 more)
Results 42
Future
1. Service
• Obtain single view of the client at all points of interaction
• Create a personalised, omni-channel, self-service experience
• Create and manage world class service levels at all points
2. Efficiency
• Focus on staff productivity and process optimisation
3. People
• Attract and retain top quality people
• Become the best incubator of industry leaders
• Build our culture of greatness and innovation
Objectives
© 2017 Capitec Bank
Results 43
Future
4. Business Delivery
• Develop capacity to deliver in fast changing environment
• Deliver projects in reduced time
• Develop and maintain a client centric focus
5. Quality Clients
• Increase market share in higher income segments
• Improve quality of banking clients through stable product usage
• Move transactions from branch to mobile/self-service channels
6. Digital Banking Platform
• Develop client profiling
Objectives (continue)
© 2017 Capitec Bank
Results 41
thank you