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Quarterly Disclosure In Terms Of Regulation 43 Of The Regulations Relating To Banks
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”)
QUARTERLY DISCLOSURE IN TERMS OF REGULATION 43 OF THE REGULATIONS RELATING
TO BANKS
Capitec and its subsidiaries (“the group”) have complied with Regulation 43
of the Regulations relating to banks, which incorporates the requirements of
Basel.
In terms of Pillar 3 of the Basel rules, the consolidated group is required
to disclose quantitative information on its capital adequacy, leverage and
liquidity ratios on a quarterly basis.
The group’s consolidated capital and liquidity positions at the end of the
fourth quarter of the 28 February 2021 financial year end are set out below:
4th Quarter 2021 3rd Quarter 2021
28 February 2021 30 November 2020
Capital Capital
Adequacy Adequacy
R’000 Ratio %(2) R’000 Ratio %
COMMON EQUITY TIER 1
CAPITAL (CET1) 27 872 626 35.8 26 507 455 30.7
Additional Tier 1 capital
(AT1)(1) 25 897 0.1 51 794 0.0
TIER 1 CAPITAL (T1) 27 898 523 35.9 26 559 249 30.7
General allowance for
credit impairment 647 835 774 832
TIER 2 CAPITAL (T2) 647 835 0.8 774 832 0.9
TOTAL QUALIFYING REGULATORY
CAPITAL 28 546 358 36.7 27 334 081 31.6
REQUIRED REGULATORY
CAPITAL(3) 8 558 137 9 513 242
(1) Starting 2013, the non-loss absorbent AT1 and T2 capital is subject to a
10% per annum phase-out in terms of Basel 3.
(2) The new regulations relating to the capital requirements for banks’ equity
investments in funds became effective on 1 January 2021. In terms of the new
regulations, banks are allowed to adopt a look-through approach to calculate
the risk weighted asset exposures for equity investments in funds. Capitec
invests in money market unit trust (“MMUT”) investment funds, which are
included in the scope of the new regulations. The underlying assets of MMUT
investment funds are typically invested in a composition of Government Bonds,
Treasury Bills and interest bearing deposits with banks. Up until 31 December
2020, the investments in these MMUT’s were classified as corporate
investments and included under credit risk, which were risk weighted at a
100% risk weight. From 1 January 2021, these investments were classified as
equity investments in funds and are now included under investment risk.
Capitec adopted the look-through approach as outlined per the new regulations
to calculate the risk weighted exposures of these investments, and the
effective risk weighting of these funds amounted to 55% for the month of
February 2021. This change, along with our continued strategy to invest in
low risk weighted assets, contributed to a reduction in risk weighted assets
during the fourth quarter of the 28 February 2021 financial year, and resulted
in a higher Capital Adequacy Ratio.
(3) This value is currently 11% of risk-weighted assets, being the Basel
global minimum requirement of 8%, the Capital Conservation Buffer of 2.5% and
the Domestic Systemically Important Bank (“D-SIB”) capital add-on of 0.5%,
disclosable in terms of Directive 4 issued by the Prudential Authority on 27
August 2020.
The Prudential Authority issued Directive 2 on 6 April 2020 and temporarily
relaxed the Pillar 2A South African country-specific buffer of 1% to provide
temporary capital relief to banks during this time of financial stress
following the outbreak of the Covid-19 pandemic, in a manner that ensures
South Africa’s continued compliance with the relevant internationally agreed
capital framework. It is currently anticipated that the 1% Pillar 2A
requirement will be reinstated on 1 January 2022.
4th Quarter 2021 3rd Quarter 2021
28 February 2021 30 November 2020
R’000 R’000
LIQUIDITY COVERAGE RATIO (LCR)
High-Quality Liquid Assets 57 601 979 49 670 375
Net Cash Outflows(1) 2 342 837 2 254 621
Actual LCR Ratio 2 459% 2 203%
Required LCR Ratio(2) 80% 80%
(1) Capitec has a net cash inflow after applying the run-off weightings,
therefore outflows for the purpose of the ratio are deemed to be 25% of gross
outflows.
(2) The Prudential Authority issued Directive 1 of 2020 on 31 March 2020 and
temporarily relaxed the minimum LCR requirement on 1 April 2020 from 100% to
80%. The reason for the decrease is attributable to the current financial
market turmoil due to Covid-19 where market liquidity has decreased, and banks
expected to be under increased pressure to comply with the currently prescribed
LCR requirements.
4th Quarter 2021 3rd Quarter 2021
28 February 2021 30 November 2020
R’000 R’000
NET STABLE FUNDING RATIO (“NSFR”)
Total Available Stable Funding 136 500 427 136 206 928
Total Required Stable Funding 61 746 242 59 944 901
Actual NSFR Ratio 221.1% 227.2%
Required NSFR Ratio 100% 100%
4th Quarter 2021 3rd Quarter 2021
28 February 2021 30 November 2020
R’000 R’000
LEVERAGE RATIO
Tier 1 Capital 27 898 523 26 559 249
Total Exposures(1) 158 134 375 153 456 051
Leverage Ratio 17.6% 17.3%
For the detailed LCR, NSFR and leverage ratio calculations refer to the
“Banks Act Public Disclosure” section on our website at
www.capitecbank.co.za/investor-relations
By order of the Board
Stellenbosch
13 April 2021
Sponsor - PSG Capital Proprietary Limited
Date: 13-04-2021 07:06:00
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