Capitec Bank Holdings Limited (CPI) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I have the easy task to welcome you here this afternoon in this beautiful new head office of Capitec and in the spectacular atrium. So you are very welcome to this AGM. I think it's the first in-person AGM since the onslaught of COVID in the beginning of 2020. So really very, very welcome. My name is Santie Botha, and I chair the Board of Capitec Bank Holdings. So the year 2022 is turning out to be another [ stimulus ] year in the history of the world with an ongoing war in Ukraine, the financial markets and absolute turmoil, the COVID pandemic, still very much with us, and our consumer out there is still under tremendous financial pressure. Capitec has also had a very eventful start to the year. We've launched Izindaba Ezinhle, which is our broad-based black shareholder scheme for our staff, where we've made nearly more than 10,500 of our staff members, shareholders in this business, which is quite incredible. And for those of you that are here in your capacity as shareholders, I would especially like to welcome you. And also in April, we announced our financial results to the market, Gerrie and André. And as Capitec, we are now serving more than 18 million clients in South Africa, which is no mean feat. In the best interest of everyone's well-being and safety, this AGM is also accessible via electronic communications. So we have quite a few people who's joining us virtually. As a quorum of members is present, we have at least 3 shareholders present and at least 25% of votes have been submitted on proxy and notice of this meeting has been given in an appropriate manner. I declare this meeting properly constituted. The notice convening this meeting was distributed on 26th April 2022 align sufficient time for all members. So I declare this open. I propose, therefore, also that the notice of this meeting is read. The procedure for voting today, this being a hybrid meeting with a virtual component. We will vote on a poll on all the resolutions proposed in the notice. We will open the voting on all the resolutions now to enable you to vote at your leisure, whilst I read through all the resolutions. So you will see on your chairs and now probably on your laps, this little piece of paper is the instructions on how to vote. So if you have your tablet or your phone or your laptop here, please follow these instructions in terms of just setting it up properly in preparation. You will be able to also send questions, view the webcast and vote whilst the poll is open. If you have joined online, I will allow for questions after all the resolutions have been read. Once all your questions have been dealt with, we will ask you to finalize your votes. We will close the poll and then we will display the results on all the resolutions on the screen. Shareholder attending via electronic communication, who wish to ask a question must select the Q&A icon, you will see it. You then take your question in the chat box at the bottom of the messaging screen and you then press send. So the company's Act also requires that the audited annual financial statements, including the directors and Audit Committee reports be presented at this AGM, a summary of the financial statements and the directors and Audit Committee reports have been distributed to shareholders and is available on the Capitec Bank website. Gerrie Fourie, the Group CEO of Capitec will then right at the end of this meeting, present an overview of Capitec's business. The Companies Act also requires a member of the Social Ethics and Sustainability Committee to report on the affairs of this committee at this AGM, this report is included in our integrated annual report and Emma Mashilwane, the Chairman of our Social Ethics and Sustainability Committee is here today and she can address any questions that you may have at the end of this meeting. So hopefully, everybody is set up and ready to vote on the resolutions, because this really is the business of the day. I will now ask Vusi Mahlangu, who is the lead independent Director of Capitec Bank Holdings to preside over my election. So Vusi?

Good afternoon, ladies and gentlemen. This is Resolution #1, the reelection of Santie Botha as an independent Non-Executive Director of the company. Just a quick CV of Santie. She served as the Executive Director of MTN Group from 2003 to 2010. And was at Absa in 1996 to 2003. She was also the chancellor of the Nelson Mandela University from 2011 to 2017. She is currently the Chair of Curro Holdings and Famous Brands. Santie received a number of awards in her life. Just to mention 2. She was a Business Woman of the Year in 2010 and she was also the Top Most Reputable Africans in 2018. Santie was appointed to the Board of Capitec and Capitec Bank as well as the Chair of the Board on June 1, 2019. Obviously, she is present today. So please vote now on Resolution #1 on the reelection of Santie Botha as an Independent Non-Executive Director. Thank you.

Thanks very much, Vusi, for that. Ordinary Resolution #2 is the reelection of Emma Mashilwane as an independent nonexecutive Director of the company. Emma is present. Maybe Emma, you would like to stand up. So Emma is the co-founder and CEO of Masa Risk Advisory Services. Her previous positions include CFO at Carl Zeiss Optronics, Head of Internal Audit at Nkonki Incorporated. Senior Manager at KPMG and CFO at Masana Technologies. She also serves on the Board of Tiger Brands and previously served on the Boards of Famous Brands as well as Murray & Roberts. Emma was appointed to the Board of Capitec and Capitec Bank on March 6, 2020. So please vote now if you have no questions on this resolution. Ordinary Resolution #3 is the reelection of Michiel le Roux as a Non-Executive Director of the company. Now Michiel, I don't think needs any introduction at all. Michiel, as we all know, is the founder of Capitec, and I personally like to call him the father of Capitec. His deep insight into the business, the reason for its establishment and the ultimate success to provide affordable, accessible, simplified and personalized banking services to all South Africans is invaluable on this Board. Michiel was CEO of Capitec from inception in 2001 until 2004, after which he served as Chairman of Capitec and Capitec Bank from 2007 until May 2016, when he stepped down. He continues to serve on the Board's as a Non-Executive Director. Michiel was appointed to Capitec Bank's Board on 6 April 2000 and to the Capitec Board on March 1, 2001. So Michiel, I don't think you need to stand up, but I would like you to stand up, please. There you are. Michiel. Thank you. So please vote now. Ordinary Resolution #4, the reelection of Chris Otto as a Non-Executive Director of the company. Chris was part of the founding group of Capitec and his corporate knowledge and experience is invaluable to the business as well as to guide new directors on this Board. Chris was the Founding Director of PSG Group and has served on the Board of PSG as a Non-Executive Director since February 2009. He is also a Director of Agri Voedsel, Distell Group, Kaap Agri and Zeder Investments. Chris was appointed to the first Board of Capitec and Capitec Bank on April 6, 2000. So Chris also does not need any introduction, but Chris is present. So there he is. Thank you, Chris. So please vote now if you have no questions on this resolution. Ordinary resolution #5 is the confirmation of the appointment of Grant Hardy as an Executive Director of the company. Grant joined Capitec in 2015 and fulfilled various roles in the financial management division. He completed his articles in Deloitte's Financial Services division, after which he spent 8 years working in various managerial positions ranging from group finance to investment management, group treasury finance, treasury balance sheet planning and analysis and Head of Finance in the banking industry in the United Kingdom. So Grant is present. Grant, maybe you would like to stand up, please. Everybody can see you. That is Grant. So please vote now if you have no questions pertaining to this resolution. Now at this juncture, it will be remiss of me not to mention André du Plessis, who retires at the end of June 2022 after 22 years at the helm of the bank's financial division. André is also a founder of Capitec. The success of the bank speaks volumes to his exceptional leadership, passion for precision in execution and strong business acumen over the years. He leaves the bank in a robust financial position in the hands of Grant Hardy, who has been carefully selected and minted to take over from André. André is present. So he's not being voted for, but please, André, stand up for everybody to see you. We said goodbye this morning at our Board meeting to under and we said very clearly, it's a good bye and not a farewell. But in front of our shareholders on behalf of the Board I would once again like to thank André for his immense contribution to the success of Capitec. Ordinary resolution #6, the reappointment of PwC as auditors of the company up to the next AGM in 2023. Please vote now if you have no questions regarding this resolution. On the Resolution #7, the reappointment of Deloitte & Touche as joint auditor until the next AGM in 2023. So also, please vote now if you have no questions regarding this resolution. Ordinary resolution #8, the authority to, one, issue loss absorbing capital securities and two, ordinary shares upon the occurrence of a trigger event. So please vote now. If you have no questions. Ordinary resolution #9, the general authority to issue ordinary shares for cash. Also, so please vote now if you have no questions. Ordinary resolutions 10 and 11 is the nonbinding endorsement of the remuneration policy and its implementation. So the purpose of ordinary resolutions 10 and 11 is to test the view of shareholders of our remuneration policy and our implementation of this policy. So ordinary resolution 10, the endorsement of the rem policy. Please vote now if you have no questions pertaining to this resolution. And then ordinary Resolution #11, the endorsement of the implementation of our remuneration policy. Please vote now if you have no further questions. We now move to the special resolutions, where we need 75% approval. So special resolution #1 is the approval of the nonexecutive directors fees for the financial year that ends on 28th February 2023. So please vote now if you have no further questions. Special Resolution #2, general authority to the company and any of its subsidiaries to repurchase up to 5% of the ordinary shares issued by the company. So please vote now if you have no further questions. Special Resolution #3, authority to the Board to authorize the company to provide financial assistance to any related or interrelated company. Once again, please vote now, if you have no questions on this resolution. And then finally, Special Resolution #4, authority to the Board to authorize the company to provide financial assistance for the acquisition of ordinary shares in respect of the restricted share plan for senior managers. So also, please vote now if you have -- if you do not have any questions. So we have now concluded on all the resolutions for this AGM. And we will deal with questions from the floor first before we will look at questions from our people that joined online. So can I also ask if you have a question, anyone here today, the microphone is here, so that everybody that's online can hear you. You have to come to the front. I hope it's not a deterrent for you to speak in the mic and ask the question for everyone to hear you. So any questions from anyone on the floor? Clear as daylight. Are there no questions? Any questions virtually anyone online with questions? No questions. It's Friday afternoon, my goodness. Okay. That takes some doing. So if there's no further questions, we're going to close the poll, and I'm going to allow the scrutineer then to correlate. First, that's going to take about a minute, so can I ask that people just talk amongst yourselves for this minute, and then they can just finalize the numbers. And then I will reveal. I have the results on the screen in terms of all the resolutions. So in terms of Ordinary Resolution 1, it's passed with 88.19%. Ordinary Resolution 2 has also been voted for with 99.47%. Ordinary Resolution 3 has been voted for with 94.74%, so passed. Ordinary Resolution 4, voted for with 85.63%. Ordinary Resolution 5, 96.93%, so it's carried. Resolution 6, 77.09%, so it's carried.7, 98.75%, so voted for.8, 99.11% voted for. Ordinary resolution 9, 98.23%. So it's carried. Ordinary Resolution 10, 79.08%, carried. Ordinary Resolution 11, 52.54%, that is the nonbinding vote for the implementation of the remuneration policy. So that is not carried. And then if we look at the Special Resolution 1, 99.21% that's carried. 2, 99.48%, it's carried. 3, 99.94%, so passed. And then Special Resolution 4, 99.84%, so that's passed as well. So thank you very much. So all the resolutions, therefore, has been passed or carried with a requisite majority vote, except for Ordinary Resolution #11, which is the nonbinding endorsement of the implementation of our remuneration policy. So as the remuneration implementation policy, did not pass with the requisite 75% nonbinding endorsement vote. We will once again set a formal date to further engage with our shareholders on this matter. So on behalf of the Board, what I'd also like to say is just to thank shareholders who proactively met and engaged with us as Board members and in particular, with members of the Remuneration Committee prior to this AGM. We also take note of input and advice given to shareholders by independent advisers prior to this AGM. And I would really like to reemphasize that we, as the Board of Capitec have an open invitation to all our shareholders to engage with us on any Capitec related matter and in particular, on REMCO issues. So please feel free. So in closing, I would just like to say again, Emma Mashilwane, who is going to depart for the airport probably shortly as Chairman of social and ethics is present. But if you need to have a word with her, she is available to answer any questions pertaining to that. And ladies and gentlemen, last word from me, I would just like to thank you once again for your support, for your interest and just being here this afternoon. We are all exceptionally proud of Capitec and having founders for in the business, I think for any business, it's a privilege, both on our Board and Gerrie, our CEO, who's leading the charge. I think this business is in exceptional hands. And Gerrie, on that note, I'm going to hand over to you. Thank you.

Thanks, Santie. Good afternoon, ladies and gentlemen. It's privilege to give you an overview of last year. I think it's a little bit of a history because our dream was to actually -- we were -- maybe just for background, we were in 13 offices basically about a kilo from here, and we wanted to build that culture. And this was part of our dream to have everyone together and then COVID happened, it happened in about 2 weeks after we've moved in, so we had to move out. And it's a privilege that [ Derek ] is here, that also helped us in the design of the building. And then we always said we wanted to have AGM here and that also didn't happen. So 3 years later, here we are. So I think that's quite nice. I spoke to Daniel. And I certainly remember that this 3 years ago that I actually spoke to somebody live, I was talking to TV screens in the past. So that's quite exceptional. What we're going to cover today is I thought to maybe just over talk about color the last 5 years because the company has changed quite a lot in the last 5 years. It's not the company, I think that you still know. So maybe just talk about the company. Then quickly look at the year that's gone past or maybe the last 2 years. And then the environment that we operate in because it's not easy out there. But how do we -- what do we do? And then how do we grow? And then the future, I think that's the most important part. How is that future looking and where we are going. So if we look at the last 5 years, I think the most important aspect of where we are is that absolute passion for our clients. Every single thing that we're doing is about our client. That client centric focus. And it's not only -- I think what is important is not only about delivering a product, it's that end-to-end client service. Even if something goes wrong, how do you recover? So it's that passion end-to-end that actually, I think, differentiates us. If I look at -- the last 5 years, 5, 6 points that I want to highlight. I think our agility. You're sitting in a complex environment that's changing the whole time, and you need to be agile. You need to be flexible, you need to change quickly. In last year, we made close to 400 credit policy decisions and changes. That just shows you how agile and how quickly we can move. And I remember, we've COVID, in that last 6 months of COVID we launched 7 new products. So that just shows you the agility. I think that also brings in -- if you look at the 5 years, our cumulative growth on our bottom line, 17%. If you take inflation, let's say, 5%, then you've actually overachieved with 12%. I think we can all be proud of that achievement. Then the scary number, 9.4 million new clients that has joined us. It's quite scary to think we're bringing in close to 2 million clients every month. And if I look at the first 2 months of this year, we're still on 200,000 a month. So I don't know where it's going to end, and I'll talk about that later, but 9.4 million new clients in 5 years. And then the best digital bank, I don't think we talk a lot about it, but we've been voted a couple of times now, the best digital bank in South Africa. And you're sitting there with 6.5 million clients that is making use of our digital app. It's quite scary. 2014, we launched the app for the first time. I spoke yesterday to our firm foundation people, and I said 2010, and we didn't even know what app is. Now 2014, we launched and now you're sitting with 6.5 million and actually, if you look at people that sign on, it's probably more 10 million people that's using our app. Credit performance I've spoken about, I think it's the ability to, in these tough times, to actually read the economy, work through the economy, make changes has helped us going though, I know 4, 5 years -- or no, 3 years ago, we've cut back, for example, the small and tiny companies because we just said they're going to take pressure. We didn't know about COVID and those -- unfortunately, those companies took the brunt of it. And I think then the most important thing is to focus on our people. You're not successful if you haven't got a big focus on people, and I'm talking about culture, we spent the last 5 years tremendous amount of time. And just for you that don't know, we spend cultures about our client-first, then our people and then our delivery. And everything we do and live is about those culture and our leadership traits. If I look at client numbers, there you can see the client numbers. We had 18 million clients and 10 million clients that's on digital, 6 million that's on the app, 4 million, that's on USSD, and that number is still increasing month-on-month. Then importantly, is 7 million clients that actually saves with us. So they've got a fixed term savings account with ourselves. So they trust us to save money for themselves, 7 million clients. And then 4.6 million, as the clients that actually banks with us. They're using our app and they've got a debit order with ourselves. So that is our core banking clients or primary banking clients and that's your potential that you're looking at. If you're looking at that 18 million versus the 4.6 million, maybe what is important on that 18 million, we've opened accounts about 25 million. A lot of people report on accounts we report on active clients. So that 18 million is people that we actually earn money from. So every month, they pay their monthly fee. So it's active clients. In total, we've got about 25 million clients, but we are saying what is actually producing income for ourselves. And you can see also what has happened is that we've got a very strong growth in clients that's earning more than ZAR 15,000, our whole drive to become a bank for all South Africans. And then also our client base now is representing South Africa. And then the interesting one, people sometimes think we give credit to everyone. We've got an open checkbook, but it's only 1.2 million clients that's got credit with ourselves. So it's a very strong philosophy on credit. If 100 clients comes into our branch, only 20% gets approved and actually take up a loan. So very strict on the credit side. And then you can see on funeral, where that has gone basically from 0.4 million in the first year to where it's now at 1.7 million clients. That is an interesting stat is that if you look at our fees, we basically kept our fees over 5 years flat. And you can see I've put in here on the right-hand side, if you add inflation, a cumulative for 6 years -- for 5 years, where the fees is going to be. And I think that's the power of Capitec is the fact that you've got these volumes that's coming through, we can cut our unit cost, and we can actually create value for our clients. I don't think there's a lot of companies in South Africa or even the world that can say they've actually reduced prices, those in red is reduced or even flat or below inflation over a 5-year period. But that's what the brand has done and that's what the capability of volumes has actually given you to scale. So I think that is a very positive slide. Then just quick in 5 years, the products that we've launched, 20 products in total is quite scary. If you look at 20 products, you'll ask myself why is the new bank app on there? We suddenly -- we launched it in 2014 and then in '17, '18, we realized, but it's not going to take the volumes. It's not going to handle it, and we need to replatform it completely. Today, you can open up an account on your app, we remote deliver your card to yourself. We do send cash, we've got scan to pay and I'm going to talk a lot about payments going forward on QR payments where we believe the future is. So a lot of development in that particular area that's coming through. Then on say EasyEquities, everyone knows we've got that partnership with EasyEquities where you can actually trade on their platform, what is quite interesting you can buy 1/4 of a share or 20% of a share, you can actually buy shares in America. We've got over 200,000 clients. It's making use of EasyEquities. And then Live Better. I'll talk about Live Better later on, but that's where we believe we're going to disrupt or take loyalty to a next level and bring real value to our clients. Then on insurance side, I think 2 things that happened. Funeral. I think everyone has seen what funeral has done, 1.7 million clients. We're still acquiring 100,000 clients per month. And then on the credit side, I think it's the one thing that COVID has taught us I remember, we always renew our reinsurance in April and then COVID happened and nobody wanted to help us. We couldn't get anyone to reinsure our credit life. We had to take it on our chin and we managed it. And today, we're self-insured. So if you've learned lessons through it, but this was a positive lesson that came through it. And then on the credit side, we're giving unsecured credit now up to ZAR 500,000. So it's not small money anymore. That's on the whole purpose side, on the housing side, the car side. We're starting from a prime, everyone has got this perception that we -- or the people that's getting 20% and 25%. But we actually have risk-based you from prime up to 21% based on your risk performance. Then on the access facility, I will elaborate that. I think that is changing the whole landscape in unsecured lending and on Capitec home loans that always used to be SA Home Loans, but we actually rebranded it and that is now our product, but it's on their balance sheet that we've got a home loan product for our clients. So it's quite amazing, 20 new products that we've launched. If I look at income, and I think this is an interesting graph, in -- in February '17, 75% of our income was coming from credit and 22% was coming from transactional income. Now we're looking at where we are now, we're looking at ZAR 10 billion that's coming in from transactional income. There's ZAR 2.5 billion that's coming in from insurance. So you can see insurance is starting to play a very important role in our income. And then ZAR 14 billion coming in from credit. So credit is only now 51% of our income. So you can see how we've actually diversified completely away because that transaction income and insurance income is giving you annuity income. And then you can actually go through economic cycles. The other way to look at it is if I look at our OpEx, our operating expenses, 100% has actually been covered by transactional income and funeral. So your credit is actually for free. If you really want to look at it in a very simplistic manner, but you can see how that has changed completely. I think other big change that we've seen is how clients has moved away from cash. If you look at that light blue, you can see cash is actually fairly flat, especially, I think if you take that as per client, it will actually go down. But you can see cash was February '20 ZAR 460 million now it's ZAR 500 million. So it's fairly flat, but you can see the strong growth in the card and transactional side and digital side. So that's a massive change that's taking place, and that's what we are driving the liberty, trying to move people away from cash. And actually moving them to card and to digital payments. So you had a big swing in client behavior. If I look at our credit side, our credit side has also changed quite a lot. If you look at our total book in February '17. You can see we had a book of ZAR 44 billion. And that whole term loan book total today is ZAR 50 billion. If you look at '22, but now you've seen it strange completely. You can see what credit card has done. Credit card is now close to ZAR 7 billion through our direct channel. And then you can see Business Banking. I'm seeing [ coal ] here at the back, business banking book is basically secured, 99% is secured, and that's ZAR 12.8 billion. So you can see our credit book has changed dramatically just remember, if you're talking about secured lending, you had prime, prime plus 1. So we believe there's still a lot of opportunities in that particular area. Question I always get is provisioning. Are we conservative? Are we not conservative? We believe we are conservative, that red line goes up in February '19, but that's because the accounting standards has changed to IFRS 9. So you can see if you look at where we are now, even through this all COVID area, what we are providing for -- we were at 20.4% in February '19, and we're now at 20.9%. You can see the spike with COVID, how we've actually provided extra. So we still believe we're very conservative in our provisioning, and we will continue to be conservative on the provisioning side. And then I think the graph over 5 years, we -- our earnings was ZAR 3.7 billion in February '17, now we ZAR 8.4 billion. And I think as shareholder, the interesting number is we've paid out in February '17, that year, we've paid ZAR 1.4 billion in dividends. This year, we paid out ZAR 6 billion in dividends, of which ZAR 1.7 billion was a special dividend. So we definitely looked after the shareholders after the COVID years. So I think if you look at that growth, very strong growth. Our ROE over this period around about 26%, 27% and our capital adequacy above -- around about 34%, 35%. So if you look at it over a 5-year period, I think we can be proud of how the company has performed and what we've achieved with the company. I would like to share with you a video about us. We are Capitec. We've gone through -- every single person in the bank has gone through a leadership course, making certain that they understand where our vision is, where -- what our strategies, what do we want to deliver this year. So I would like to share that video with yourself. Thanks. [Presentation]

I think we can be proud of what we've achieved. It's interesting, just to give a summary of our D&A income myself was April in the KwaZulu-Natal branches, actually the first time we were doing on Teams, we were talking to them as it were the first time we were physically there. And I can't explain it enough about the appreciation of our staff saying, thank you for ourselves that during that whole time, we've paid salaries, there was no debate. There was 80 branches. So you're talking about 200, 300 people that they can't go and work. We've redeployed those people to help via teams on our call centers, et cetera, et cetera. A lot of the other companies was no work, no pay. But what you've built in that KwaZulu-Natal, that teamwork and how they help the clients, I think you've got no value for it. It's unbelievable. If I quickly look at the income statement, and I'm just going to break it in 3 areas, is under income from operations. You can see we -- year-on-year, we're up 17% on the credit side. We're actually flat. If you look at net credit and that's because of the access facility that's come in and the restructuring of the book, but then we've also put ZAR 12 billion in government bonds, where we're earning about 5% more. You can see that very strong growth in the transactional side, 21%. So that is very promising. And then funeral income, close to a ZAR 1 billion profit that just shows you the power of our distribution network, the power of our 850 branches selling out. So you had a 17% growth. Credit impairments I've spoken about. You can see how we've released our provisions, but we still had that coverage ratio of 21%, which I've showed previously. Our book has moved completely to more higher quality clients. So it's much more higher income levels. We've actually deliberately moved away with people earning less than ZAR 5,000. And then in our provisioning, we still got a forward economic view of just over ZAR 3 billion that we're still carrying for the economy and for Ukraine, et cetera, et cetera. So you can see from a provisioning side, very conservative, making certain we are covered for the way forward. And then the question I always ask is on OpEx, why did OpEx grow of 33%, are you guys crazy. But I think very importantly is the ZAR 700 million for the BEE scheme or where the staff were actually empowered and own shares, and it's interesting also was in a hotel -- visiting a start-up meeting startup meeting is from 07:45 till 08:00 and they don't call it a start-up meeting anymore, it's now shareholders' meeting. So our staff is every morning having a shareholders meeting. So it's just a different culture and ownership that you've created. And then we don't only look after shareholders. You've got your dividend, but we are actually paid out if you're going to look at that ZAR 1.3 billion, ZAR 1.4 billion we've paid out in bonuses and share appreciation to our staff. So if you take it out, then you -- our OpEx only grew at 11%. We see that our OpEx will grow for the next couple of years double-digit figures because we're investing quite a lot into the future. And that is basically your income statement. If you look at -- we've moved from COVID from ZAR 4.5 billion to ZAR 8.5 billion. I actually look at it and say, if I look at it over a 2-year period, and then we've grown about 16% year-on-year. So I think if you can go through COVID and the unrest and you grow 16%, then you can be happy with your performance. If I move on and probably that's a question everyone is asking what is happening in the economy and what's going to happen. And my standard answer is I don't know, because I'm -- I think I can't see in that crystal ball. It's interesting. We were just in America and London talking to asset managers and everyone is asking me what is going to happen with inflation in South Africa and I said, tell me what's going to happen with inflation in America, and then they were quite. So I think there's quite a challenge because if you look at our inflation is, let's say, 6%, Americas at 8%, U.K. is at 9%. And I promise you traveling now for the first time where beer was $5, now it's $8, you're suddenly at ZAR 16, you're feeling it. But I think it's going to be interesting. If you look at the PPI, U.K. has come in with a PPI, producer price index, of 30%. So I think we end for a nice -- for very challenging times in this next, I would say, 12 to 18 months that one needs to manage. It's interesting, yet, if you go and look at the company's performance that we're seeing in the business banking, we're seeing strong performance from there. But there's a lot of pressure on our clients. But yes, if I go and look at, again, we look at people that has cash stress, so they've got less than 20% left, that has actually improved. So you're getting very mix signals. So I think one will need to work through it. I think China is going to have a big impact. We all know that they've got COVID regulations, and there's a big supply shortage that's been caused by that. And I think then the biggest challenge, not only here, but also worldwide is the shortage of skills we spent this morning probably often now in the Board meeting discussing skill shortage, the South African education system, the demand. Because what you're finding is there's a certain number of people and they're just moving around and the salaries are just going higher, higher and higher. So there's a tremendous focus on that side in a quality because of COVID. And yes, I'm not going to talk about infrastructure, I'm not going to talk about Eskom. I think everyone knows what's happening on that particular side. I think what is also important from a shareholder is to understand that the competition has moved away from just banks. We're talking now about tech company, Samsung Pay, Apple Pay, Google Pay, they're all starting to come in. And I've always said, if you look at WhatsApp, we're all using WhatsApp. But the moment you start -- you start to use it and you start adding a bank account on it, people is going to start transacting. So those -- we are mind setters. Then we're looking at the Vodacoms, the MTNs. So you need to think today because everyone is moving away from peer banking to financial services and how do we actually bring that in? And even the retailers, Shoprite Checkers has come in with its own bank account. So everyone thinks banking is quite easy. But I think it's your mindset to say, how do you solve the financial need of the client in totality. So I think it's quite challenging. But if I look at -- if I look at why are we growing apart from culture and clients, et cetera, et cetera, I think in a very short summary, you're sitting with 18 million clients. You're sitting with 850 branches, so a tremendous powerful distribution network. You're sitting with 10,000 consultants that can actually sell. And that very few people understand our market share per product is far below 10%. On credit, we've got about a 6% market share, on savings a 7% market share, on insure, we've got a 1% market share. On business banking, we're below 1%. So you're sitting with this client base, but you've got a massive opportunity on the market share to optimize your revenue streams. I'm quickly going to cover our focus on growth. I think the one word that's very strong here is focus because you need to focus in a turbulent environment to be successful. And I think this is basically, sums it up is that obsession to give clients a simplistic transparent bank offers that they really understand because if you don't understand something, you can't sell it, you can't create word of mouth. So word of mouth is critical in this game. Very strong focus on innovation. And then a challenger mindset, I think there's a few companies that we -- are saying how do we disrupt ourselves. As we're sitting here, we're sitting and say, how can we disrupt funeral? How can we disrupt our credit side. It's that mindset that you need to have. And then we always stick to our fundamentals. And then this -- what we have created is a single solution for Capitec. If you're going to look at our full product range, the only thing that we are missing is a secured vehicle product, and we're actually working on that currently, but we offer the full range. But what is unique is every single client doesn't matter what your income is, what the level is, who you are, you get exactly the same. There's no differentiation. Everyone get a black card, everyone gets the same fee structure, everyone is treated exactly the same. There's not a lot of companies that can actually say they treat all clients exactly the same. If you look at our service model, and I think that's -- I always get this question, but what is the digital players going to do? I believe you need to have not only a digital platform, but you need to able to service the client on multiple channels. So what we've got is physical channels. That's our branches. Then you're sitting with your call centers, then you're sitting with your digital challenge and then what everyone forgets is the ability to engage with your clients. So how do we work with 18 million clients? I think the first thing is, yes, you've all seen, we've got 850 branches. What people don't realize is if you go into a branch, that's the off service area, it's starting to get bigger and bigger and bigger, and it's got the same experience as what you're seeing on the app. So what we are doing is creating that the person has got confidence in helping himself and then he moves onto the app. And then we've got 7,000 ATMs, and that's probably the one [ not where we've got ] so SKUs at ATMs as to say, how do we actually getting that away. If you look at our call center, it's quite scary to think about 7.9 million clients that has actually contacted our call center, 34 million minutes that we're talking at the call center. We've got over 1,400 people in those call centers available to service our clients. And then Capitec Direct, Capitec Direct grants us the ability to actually offer over the telephone, credit, insurance and switching to yourself. And that book is growing over ZAR 4 billion now on Capitec Direct. And that's that need of the client that says, "I don't want to go to a branch. I want credit, and I want to move to a one-on-one situation. App, I've already spoken about the 10 million clients as on the app, 1.4 billion transactions that was done on the app last year. We're hitting now 6,000 transactions per second on the app on a peak day. We can go up to 12,000 seconds -- 12,000 transactions per second. Maybe just to give us some perspective, I was somewhere in a conference and I thought we're quite grand with our number. And then people are talking about Google and these people, they're talking 100,000 to 200,000 transactions per second. So it shows you what can be done in that particular area. And then on the engagement side, the ability to engage with your clients, analyze your clients, understanding your clients and actually talking to them via e-mail app, et cetera, et cetera. 275 million engagements that's actually taken place to our clients to inform them on where we are going. If I look at leadership or people, the most important is I get a lot of question on succession planning, especially with André, that's now retiring. And I've got 2 answers there. I said if you look at the last 8 years, we've lost -- or not lost, we've -- 6 of our execs has retired, and we've actually replaced them seamlessly. There's a long-term view of actually making sit it in there our successors. And then if you're looking at the business, we're actually sitting with a group exco. We're sitting with a retail exco and a business banking exco,and they drive those organizations as if its their own and take ownership of it. So there are very big focus on leadership and succession planning, very strong focus on CEO culture, where we believe every single person in the bank is a CEO and the C stands for client, the E is energy, and O is ownership. So we really would like people to take decisions own up. And if you look at the whole organization, it's been divided up where there's business owners that takes full ownership of a product or a process to have full accountability on their income streams that -- which they are delivering to ourselves. Talent acquisition and development, I've spoken about how important it is to develop and grow people from in. And then I think the biggest challenge for us going forward and I'm now talking, I think, worldwide, is there's working from home, working from office. I'm a big believer in working from office. If you want to engage, if you want to develop people, if you want shoulder-on-shoulder, you need to have that flexibility to work from home, but you need to be in the office to really engage. And I think that is the that -- the companies that's going to get this right is going to be a company that's going to be successful going forward because you can't go 100% from home and you can't go 100% from office. But that mix and the type, your leaders need to be here. A person that's a cloud, that's just performing certain tasks, they can be at home. But you need to have that engagement and making certain people understand your culture. So that for us is a very high focus to make certain that we get that recipe right. Then the area that we don't speak about a lot is CSI or what we do in our community. If I look at the bottom left block, for every rand our staff contribute, the company contributes ZAR 2. So we encourage our people to be involved in the communities. We were very actively involved now with the floods, with the unrest, giving money, making certain that goes through. Interesting is we had to fly in food for our own staff and their families when the KwaZulu-Natal est la plus, to make certain that they have got food. It's that mindset that you need to have. Very strong focus on enterprise development, Imvelo. It's a fund where we're actually investing in start-up companies, BEE kind companies to make certain that they contribute. And then if you look at the Capitec foundation on maths [ on school ] level, it's quite interesting what we're focusing on making certain that headmaster undergoes basically MBA because he understands how to manage the school and you can get your maths teachers on a standard, you lift your criteria with 20%, 30%, 40%. And we've seen it bringing these people to UCT to really go through that course and make certain, they really understand how to manage and lead people. So a very strong focus on social development. Now probably the most important in the future, I didn't say 1 year, 2 years, 3 years, it's probably more for the next couple of years. I spoke last night at firm that's where all our people come through and I say, I feel excited as I was when we started the company because it feels to me we starting again with the opportunities there is. If I look at probably the #1 priority for us is payments. And payments is to make payments easy for the client and take people away from cash because the moment I can -- the person is doing a payment then we can understand what behavior he's doing. We've got data and we've got data, then we can add value to his life. We can provide credit. We can do a lot of things. So that is a very big focus for us. That's why we've launched QR and you've seen the scan to pay. So if you want to pay, you can just scan on a QR code and you pay immediately. We've been in pilot now whereby a client, if I want to pay Donnie, and he's sitting in George playing golf, then I can actually send him a WhatsApp message, he just accepted and on QR he gets paid. So it's just to make that whole process easier and make it more affordable. So there's a lot of focus on the payment side. I think the one that you're actually going to see is if you go online, I hate it when I have to put in my credit card details my surname, my address and all that nonsense. So Capitec pay me, you put the details in automatically and then we store it for yourself. And in the moment, if you want to pay it online, you just click on it and you confirm your -- with the password and you pay. Then you've got no interaction as it makes that whole online payment side, slick. So a tremendous focus on that. But I can sit here for hours and talk about payments. AJ has produced a video for us to just look at the future of payments and that you maybe better understand where we are going with payments. [Presentation]

Key focus areas, we talk about game changes that we're really focusing on is actually changing that behavior of the client. I think the other ones that we're looking at is Live Better. If we look at Live Better, it's our loyalty program. Again, it's different to other loyalty programs because we see loyalty programs as complex. People don't understand it. 10% of people understand it, 90% don't understand it at all. Yes, it's very simple. If you have got one of our products, you've got 3 recurring payments and you use 5 transactions on your app, you get 0.5% on your debit card and 1.5% on your credit card. Simple, everyone actually gets it. So the whole drive here is to bring the clients top of wallet. The majority of clients has got 2 or 3 types of banks that they got. And we want to make certain that our Capitec card is the first one that they actually take out. Then coming back to payments, is the ability to make certain we've got the data. We're busy, and we're in a project, a massive project where we're moving all our data from on-prem to cloud. So we should be finished by October next year, and that gives you computing capabilities. It gives you a lot of extra power. Just to give you an example, our provisioning model used to run 5, 6 days. Now it's running 4 hours, so you can better engage with your client, you can better understand what's happening because you can use machine learning and insights to optimize the client side. Then on the credit side, we've always done where you need to have a pay slip to get credit from ourself. We're starting now very strongly to go into other income and multiple income. So if a person has got a pay slip but he's got rental or he's got a dividend or some other income, we're starting to bring that into our streams. And that actually links in then also to the last one is our business banking, where we believe in business banking, the big opportunity lies in unsecured credit that you give to SMEs and not in intuitive credit, yes, that going to be a focus. So how do we use our knowledge that we've got in retail to optimize business banking and to create what we've done in retail and build the unsecured side over a period. We are full out going flat out to actually rebrand in March next year, complete digital offer whereby you can do everything on a portal or on your app, so I'm quite exciting about the things that we've got, Karl and [ Nim ] have designed a 13 pager on exactly how everything is going to work, and I think the Board was quite excited about this, this morning, spelling out exactly what we're doing. So I'm quite -- if you look at those 5 big areas that we're going to focus: Payments, Live Better data, credit and business banking. I believe, there's plenty of room for us to grow. Then lastly, from my side, I want to thank first the Capitec team, the employees, our leadership team, our exco, divisional exco, it's an incredible journey to actually work with all the people, the energy, the passion for the brand, the focus on the client. So from my side, thanks a lot for that. For the shareholders, for your contribution and believing in ourselves. Thanks for that. And then lastly, for the Board, Santie to you and your team, your support, your understanding. Thanks a lot. So that's all from our side. Thanks a lot. There's chips and bubblegum, if you go up the stairs. But I promise you there's wine. So let's make it wine, chips and bubblegum. And there's lift as well for people that don't want to go up with the stairs. So from my side, enjoy yourself, the management team are there. So if you want to ask questions, you can ask us questions any time you want. Thank you very much.