Innovative Thinking

1
Innovative Thinking
in Retail Banking
Investor Pre - Roadshow Presentation April 2008
2

Our Focus

• Individuals
• in need of
• basic low cost banking

3
We deliver on four core needs

• Accessibility
• Affordability
• Simplicity
• Personal Service

3
4
The Unique Business Model
Unique / Innovative Technology
Providing
Simplified / Focused Product Range
Via
Customer Focused Low Cost Delivery Channels
Transactions
Annuity
ATM POS INTERNET CAD CELL
Branches Mobile Bank
4
5
The Capitec Bank Revolution Our Technology
Platform

• Features
• Paperless
• Process Driven
• Real Time Delivery
• Cashless
• Central Control no branch back office
• Handle high volume transactions efficiently
• Structure
• Open Platform
• Windows-based
• Scaleable

5
6
Simplified Focused Product Offer - Structure

• Transactions
• Purchases
• Transfers
• Debit orders
• Stop orders

Multi loan
Savings Account
1 / 3 / 6 month loans
Focus Save Accounts
12 / 18 / 24 / 36 month term loans
Cash Wallet
6
7
Simplified Focused Product Offer - Price

• Savings and Transactions
• Aggressive

• Loans
• Competitive

7
8
Our People

• Cultural alignment
• Service driven
• Recruit for potential, train for skill
• Team approach
• Zero to hero in 7 weeks
• Firm Foundations
• Ongoing investment in competency
• E Learning

8
9
The Market
Average Income Spread
Target Market 17m
Household Income after statutory deductions
9
10
Client Base
10
11
Salary ClientsAge
11
12
Loan ClientsAge
12
13
Loan ClientsIncome Level
13
14
History

• Microlending
• Bank (2000/1)
• - Management team
• - Determining strategy
• - Bank licence
• - PASA membership
• - IT platform
• Conversion
• - Microlending to bank
• - Deposit taking
• - Client conversion to bank with Capitec
• 4. Growth Strategy

14
15
Group Operations Structure
PSG Group 34.9
Management 8.79
BEE groups individuals 15.99
Other 24.53
Non-ex directors (excl black directors) 15.79
CAPITEC BANK HOLDINGS (CBHL) Listed and
registered as a bank controlling company
100
100
75
Key Distributors (FMCG wholesaler)
Capitec Bank (Retail bank)
Other (No activity)
15
16
Management

• CEO
• Riaan Stassen (54)
• CFO
• Andre du Plessis (46)
• Other Executives
• - IT Chris Oosthuizen (53)
• - Risk Christian van Schalkwyk (52)
• - Human Resources Leon Venter (46)
• - Operations/Sales Gerrie Fourie (44)
• - Marketing Corporate Affairs Carl Fischer
  (51)
• - Credit Risk Jaco Carstens (39)
• Ian Abrahams (39)
• - Card Services Business
• Support Andre Olivier (40)
• Faick Davids (31)

16
17
Employment Equity Profile
17
18
Key Risks and Mitigants

• Credit
• Liquidity
• Regulatory
• Systems
• Interest rate
• Taxation

18
19
Liquidity Management
- Banking Crisis 2000/1 - Philosophy

• Caution top priority (even over
  profitability)
• Retail deposits - payout when requested
• - cash usage
• - short term loans
• Facilities - don't bank on it
• - used for convenience
• Fixed vs fluctuating rates
• Forex - cover all positions
• - no appetite
• Simplicity / no complex structures

19
20
Liquidity - History

• Initial strategy Self funding
• Build trust Retail savings deposit base
• Wholesale funding agreements
• Un-published ratings
• Preference shares
• Published ratings
• BBEE
• Short term corporate paper
• DMTN
• Retail term deposit base

20
21
Basel II Pillar 1 Minimum Regulatory Capital
Requirement

21
22
Basel II Pillar 2 The Supervisory Review
Process

• Supervisory Review and Evaluation Process
  (SREP)
• Risk Management
• Capital Management
• Capitec Internal Capital Assessment Process
  (CICAAP)
• Foundation Internal Ratings Based
  approach (FIRB) for credit risk

22
23
Basel II Pillar 3 Market Discipline

• Regulation 43 Public disclosures
• Quarterly, Bi-annual and Annual disclosures
• Dedicated Website Page under Investor relations

23
24
National Credit Act (NCA)

• Act
• Income components ceilings
• Procedures, rules output
• Debt counseling mediation
• VAT leakage
• Opportunity
• Strategy (pre-empting effect)

24
25
Financial Highlights
26
Holdings vs Bank results
- IFRS Holdings Equity settled in
Statement of Changes in Shareholders
Equity Bank Cash settled through Income
Statement
26
27
Loans Advanced
6,000
5,162
4,500
3,449
2,863
2,259
3,000
Rm
1,904
1,477
1,500
0
2003
2004
2005
2006
2007
2008
27
28
Number of Loans Advanced
28
29
Loans advanced per product
29
30
Impairment per product
30
31
Net Transaction Fee Income
31
32
Value of Savings Deposits
32
33
Operations
34
Bank Branches
34
35
ATMs
35
36
Employees
36
37
Profitability
38
Headline Earnings
38
39
Headline Earnings per Share
300
259
250
222
200
165
150
Cents
101
100
70
45
50
0
2003
2004
2005
2006
2007
2008
39
40
Return on Equity
40
41
Cost to Income Ratio
41
42
Shareholder Funds
1,217
1,117
1200
900
564
R'm
600
473
426
384
300
0
2003
2004
2005
2006
2007
2008
42
43
Market Capitalisation
43
44
Total Assets
44
45
Going Forward
46
Going forward

• Investment
• Distribution
• - 25 Branches
• - 75 Mobile Banks
• - 50 ATMs
• - 2 250 POS devices
• Technology
• - Branch Streamlining
• Challenges
• Cash-plastic
• Economy
• Competitors
• Funding
• Crime

46
47
Thank You
Questions ?