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

I am Santie Botha, I chair the Board of Capitec. So it is my pleasure to welcome you all, our shareholders, to the 2024 Annual General Meeting. I would like to welcome everybody that's present here today and then also, shareholders that are attending virtually. So in the first 5 months of calendar year 2024, we have launched Capitec business. We've announced the acquisition of a controlling interest in Avafin, a European-based online consumer credit provider operating in 5 countries, including Mexico. And we've piloted Capitec Life cover. It's another new product that will be launched in the market very soon. And Katherine, our CEO, is present here today, and she can tell you all about it. Capitec's world-class and is truly a world-class executive team has a razor sharp focus on digitalization, innovation and placing the client front and center of every decision, a new initiative that's launched in the market. As South Africans, we voted in our general election this past Wednesday, and I'm convinced that if Capitec's name was also on the very lengthy ballot paper, 1/3 of South Africans would definitely have voted for this brand because that's how many South Africans trust Capitec with their money. Delivering on premises and exceeding client expectations are the fundamentals of what this business is about. We all know as South Africans that we always make a plan even when serious odds are sometimes stacked against us. And nowadays, with ever-increasing food and energy costs, unpredictable load shedding, record unemployment or linked to very low economic growth in a politically charged uncertain and highly volatile country and world, the odds sometimes seem insurmountable. But in every challenge, there's always opportunity. And that is how Capitec started, and that is how Capitec still thrives today. The Capitec can-do culture and people on inspiration to every single one of us to be active in whatever way we can to defend our democracy, which brings me to the matters of today. So as a quorum of members is present, a 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 the 26th of April 2024, allowing sufficient time for members to peruse the contents thereof. I propose, therefore, that the notice be taken as read. This being a hybrid meeting with a virtual component, we will vote on the poll on all the resolutions proposed in the notice. Guidance on how to vote was included in the notice of this AGM and is available on the Capitec website in the Shareholder Center. A copy of the guidance note on the voting procedure has also been made available at this venue so please follow the instructions carefully. We will open the voting on all the resolutions now to enable you to vote at your leisure, whilst I read through the resolutions. You will be able to 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 vote, close the poll, and we will then display the results of all the resolutions on the screen here behind me. Shareholders attending via electronic communication who wish to ask a question must select the Q&A icon. Type your message in the chat box at the bottom of the messaging screen and then press send. The company's act requires that the audited annual financial statements, including the directors and Audit Committee reports be presented at this meeting. 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, our Group CEO, will present an overview of Capitec's performance at the end of this AGM. The company's act further requires a member of the Social & Ethics Committee to report on the affairs of this committee. This report is included in the Integrated Annual Report. Cora Fernandez, who's sitting here in front, she's Chairman of this committee, and she can address any questions that you may have at the end of this meeting. So we now move to the resolutions. We have 11 ordinary resolutions, and then we have 3 special resolutions. So ordinary resolutions 1, 2, 3. Four directors, including myself, retire by rotation at this AGM and 3 are available for reelection. Jean Pierre Verster will retire from the Board at this AGM and is not available for reelection. At this juncture, I would like to thank Jean Pierre for his exceptional contribution to the Board after his 9 years of service. I will now ask Vusi Mahlangu, our Lead Independent Director, to preside over my reelection. So Vusi, I'm just going to stand here.

Good afternoon. Ordinary resolution #1, the election of Santie Botha as a Director of the company. Santie is an independent and Non-Executive Director of Capitec. She was appointed on the Board of Capitec and Capitec Bank on the 1st of June 2019, and she has been our Chairman of the Board since the date of the appointment to the Board. Santie has vast business experience. And as said, as an Executive Director for both African Bank -- so FSA Bank and MTN -- sorry, further slip. She was the Chancellor of the Nelson Mandela University from 2011 to 2017. She is an experienced Board Chairman, having served as such for a number of JSE-listed companies. Please vote now if you have no questions regarding this resolution. Thank you. [Voting]

Thank you, Vusi. Ordinary resolution #2, the reelection of Michiel le Roux as a Director of the company. Michiel is the founder of Capitec. His deep insight into the business is invaluable on the 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 the 6th of April 2000 and to the Capitec Board on 01 March 2001. Michiel is an invaluable member of our Board. He is present. Please vote now. [Voting]

Ordinary resolution #3, the reelection of Vusi Mahlangu as a Director of the company. As already mentioned, Vusi is Lead Independent Director, and was appointed to the Board of Capitec and Capitec business, a Capitec Bank on 25 September 2020. Vusi is a Co-Founder and Director of Tamela, a corporate finance advisory and fund management company. He has extensive experience in finance and investment banking and is a highly respected member of the Capitec Board. Vusi as you've seen him on stage, is definitely here and please vote now. Ordinary resolutions 4 and 5, the Board appointed 2 new directors, Nadya Bhettay and Naidene Ford-Hoon in September 2023. Shareholders now have the opportunity to confirm their appointment. So Ordinary resolution #4 -- sorry, just go back. Yes, confirmation of appointment of Nadya Bhettay as a Director of the company. Nadya is an Independent Non-Executive Director of Capitec. Nadya was appointed to the Boards of Capitec and Capitec Bank on 7th September 2023. Nadya has extensive experience in mergers and acquisitions, strategic implementation and business operations management, both in the telecoms as well as technology industries. She has served as Financial Director for Vodafone Ireland, Chief Strategy and Business Development Officer for the Vodacom Group and Chief Operations Officer for Vodacom Business Ventures and Strategic Partnerships. So Nadya is present. So I think as the new Board of Directors, you must get up so that everybody can see you. So this is Nadya. So please vote now. [Voting]

So Ordinary resolution #5. The confirmation of the appointment of Naidene Ford-Hoon as a Director of the company. Naidene is an Independent Non-Exec Director of Capitec. Naidene was appointed to the Board of Capitec and Capitec Bank on 7th September 2023. Naidene has over 25 years experience in finance divisions. She has been head of finance function, specifically in the financial services sector. Naidene has, amongst others, served as the Group Chief Financial Officer of the South African Reserve Bank, as well as of Alexander Forbes Group Holdings. She also serves on the Independent Regulatory Board of auditors. So Naidene is present, so Naidene, please stand up. Thank you. So please vote now. [Voting]

Ordinary resolution #6, the reappointment of Deloitte & Touche as joint external auditor until the next AGM in 2025. Lito Nunes, Deloitte's Engagement partner for Capitec is present. So Lito is present. So please vote now. [Voting]

Ordinary resolution #7, the appointment of KPMG as joint external auditor until the next AGM in 2025. So shareholders were informed last year that PwC will step down as external auditor due to the mandatory audit firm rotation rules imposed by IRBA. The rule for mandatory rotation for auditors have since been set aside by the Supreme Court of Appeal, as you've seen. KPMG was, however, nominated for appointment as a new external auditor for Capitec at the time. [ Harvey ] Kobe, KPMG's engagement partner for Capitec is present. So please vote now. [Voting]

Ordinary resolution #8. Authority to issue loss-absorbent capital securities as well as ordinary shares upon the occurrence of a trigger event. So please vote now if you have no questions. [Voting]

Ordinary resolution #9, the general authority to issue ordinary shares for cash. Please vote now if you have no questions. [Voting]

So Ordinary Resolutions 10 and 11. This is the nonbinding endorsement of the remuneration policy and its implementation. So the purpose of Ordinary resolutions 10 and 11 is to gauge the view of shareholders of our remuneration policy as well as the implementation of this policy. So Ordinary Resolution 10 is the endorsement of the policy. So please vote now. And then Ordinary Resolution #11 is the endorsement of the implementation of the remuneration policy. So please vote now on that as well. [Voting]

So that brings to a close all the ordinary resolutions. The 3 special resolutions. Special Resolution 1 is the approval of the Non-Executive Directors' fees for the financial year that ends on 28 February 2025. So please vote now. Then Special Resolution #2, the general authority to the company to repurchase as well as its subsidiaries, to purchase up to 5% of the ordinary shares issued by the company. So please vote now. And then the last resolution is Special Resolution #3 is the authority for the Board to authorize the company to provide financial assistance to any related or interrelated company within the group. So please vote now.

So we've now concluded on all the resolutions for this particular AGM. And it's now time for questions for anyone that has questions. There's a microphone over there and over there. So if you have a question, please walk to the microphone or otherwise, someone can assist and maybe take the microphone to the person. But maybe just raise your hand or walk straight to the microphone. So I'll take my glasses off. Any questions from the floor? No questions? Okay. Are there any questions via electronic means? Okay. So [indiscernible] from ESG Insight on behalf of various pension funds has the following questions on the remuneration policy. "The ESG component is still too broad to allow shareholders to hold executives to account on this key strategic initiative. Why is REMCO not setting specific measurable targets instead of being wishy-washy?" We raised this concern before and the explanations given in the remuneration report are dismissive. So between Cora and Vusi, so the ESG component is still too broad to allow shareholders to old executives to account. So Cora, do you want to give it a go?

[indiscernible]

Okay. So and Vusi, did you want to say something on ESG?

[indiscernible].

Yes, maybe just stand up and just...

Yes. It is work in progress, and we do acknowledge it. And we do engage with shareholders on a regular basis. And when they take that will continue such engagements to get the specifics, and we'll try -- where possible to address those questions.

Thank you, Vusi. So just as a matter of interest, in February, from a remuneration as well as social and ethics perspective, we engaged with shareholders on about 8 occasions and dealt with specific concerns or issues they had. And as we progress, we do address the issues where appropriate for the business as well. So we'll keep on engaging. The remuneration report. "Why is there no greater detail provided in the report for the 25% increase in CFO pay, relative to the market and benchmarking? So on this one, it's a new appointment in terms of Grant Hardy. I think from a benchmarking perspective, one can provide greater detail going forward, if required, and we can deal with that and clearly on a one-on-one basis as well. But that has been benchmarked properly in terms of the financial services sector. So I will take that. Any more questions? No further questions. Okay. So no further questions. So thank you very much for those 2 questions that we've received by email. So I think what we can now do is have a look at the results, please, from the scrutineers there in the back. So if we can maybe look at Resolutions 1 to 7 first, Ordinary Resolutions. Is that at all possible? Are there still votes coming in? Maybe talk amongst yourselves. They just sort of collating the results. Okay. The team is ready with the results. So if we have a look at Ordinary Resolutions 1 to 7, they have all been passed above 95%. So thanks for that. And then maybe 8 to 11. Yes, here we are. Ordinary Resolutions all passed and then, the Special Resolutions as well. So everything, all the resolutions have been passed above 90%, which is pleasing. So in closing, Cora Fernandez, Chairman of the Social Ethics, I've said before, is present. Are there any questions that anyone would like to ask on the social and ethics and sustainability report that's in the Integrated Annual Report? Okay. So if there's no more questions, I would like to thank you, our shareholders, for being present here today. I'd like to thank you for your interest in this great company. And I would now like to hand over to Harry Fourie, the CEO, who will take us through a proper presentation.

Thanks, Santie. Thanks. Good afternoon, ladies and gentlemen. I've got a strategic question or thing that I need to think about. Am I going to talk for 2, 2.5 hours and no drinking time? Or 10 minutes, and make a lot of drinking time? It's a pleasure for me to talk about our results, but I'm going to talk much more about our strategy and where we're going and what we're focusing on. I think I just want to take us back in 2000 when we actually started. A lot of people has got this misperception that we are focusing on the lower incomes and different segments in the market. But we said from the beginning, we want to bank 95% of South Africans. And so we want to offer banking to South Africa in those 4 fundamentals in a very simplistic manner, making certain that a person understands it is transparent, is affordable. And you'll see right through what we're doing in all our products, affordability comes out very strongly. I always ask that question now. Are we not 20%, 30% lower than the market? Accessibility. I remember, when we open our first branch, we opened up retail hours, not banking hours from 9 to 3. I still don't understand why banks open 9 until 3, why they're not [retail ] hours? And then personal service. And personal services, I think the one area that we've done exceptionally well in making certain things very measurable. I remember when we started, we said, "Our consultants need to have a metric. They need to have mass and then certain psychometric tests that they need to perform to make certain that they can connect with our clients and do something special with the clients." And then for the first 20, 22 years, we actually flew everyone down to Capetown to make certain that we understand and are not trained to a certain level. I think that's just how we've taken service to a different level. I think what is interesting, if you look at Capitec, how we've evolved, the company has changed tremendously, and you'll see in my presentation how the company in the last 4, 5 years, how we've changed quite a lot. I think if we look at up to 2010, probably more towards 2012, our biggest fight was to move on a micro lender to become a bank. Everyone saw us as a micro lender. But it's actually interesting as only in 2010 that we actually -- 2009 that we actually launched fixed-term savings where people actually are -- can put money with ourselves and they actually are there for 60 months or longer. It's also in 2010 that we've actually launched the 48 months product. We had a very interesting credit policy. Those days, we talked about 1 up, 2 up, and then you normally have the night [indiscernible] after that. I think 2.1 million clients talked to itself. It's interesting when we actually started, we said our business model was built around 2 million clients. Then 2015, I think there is a big milestone where people actually start realizing but we are a bank. We're offering full flick banking services. We moved to 6.2 million clients. Interesting, people that actually designed the app and actually designed users. [indiscernible] I was in my office this morning, they've actually decided to take other routes retiring. And it was quite interesting talking to them to put that app into the market in 2015. But I think the big change in service was that side-by-side consulting. And just that everyone understands that if you look at in a Capitec branch, you've got the computer in front and in the consultant here and the client on this side. Everyone looking to that computer and making certain that the client -- isn't controlled a client, understand what is happening with himself. And that made a big difference on where we were going. Then in 2020, we could actually say we are a digital bank. We've moved to close to 14 million clients, 6.7 million digital clients. But we've only launched a credit card in 2017 and funeral plan in 2018, and we'll unpack funeral plan later on. And then acquired Mercantile December 2019, just made 2020. So it's interesting, credit card only in 2017 that we've actually launched. And then I think what a lot of people don't actually realize is, in 2017, we had a strategic conference with the exec team. And we said we need to create stickiness with our client. We need to move away from just becoming a bank, and we're just being a bank but become a full-fledged financial services company. And I think what you're seeing now in 2024 is how we've diversified and how we've created a strategic initiative division, Capitec business, Capitec Insurance and then the acquiring of Avafin, which had an impact. So the company has changed and evolved in 24 years tremendously and we all know about the 22 million clients, probably going to be quite soon at 23 million clients because we're still growing with 160,000, 170,000 clients per month. And then 11.2 million digital clients. By far, the biggest digital player in the market at 11 million digital clients. I think if we look at how we've diversified, we've spent in the last 3 years to diversify ZAR 6.3 billion. And it's quite interesting, if you look at ZAR 6.3 billion, it's quite clear, a lot of serious money. But if you think about what's happened, it was just after COVID, you had Russia, you had Ukraine. You had a world inflation going up, interest rates going up, and we actually had a world recession. We had South Africa in load shedding. We had a GDP growth of below 1%. And so it was really tough times. Yet, if I recall in the last 3 years, we've never thought about the risk of a recession or world recession. We only spoke about the client and what is important for the client, and we invested that ZAR 6.3 billion. And actually, what we've done is we've actually taken our IT system from a legacy platform into a completely new platform, and I will elaborate on that and working with the best of class with SAP, Amazon, Microsoft and changing our whole product portfolio. We've also moved all our data. And you'll see in my presentation, data is extremely important. We've moved all our data to the cloud, so that we've got access to it, and we can optimize our client experience. We've created a complete new payment solution, and we've created 3 completely new businesses. So let's just look at those businesses and see what they've done. If we look at Personal Banking, the ZAR 7 billion includes strategic initiatives. We've got a hybrid service model of branch and digital. The profit in that personal banking, ZAR 7 billion that's come through. I think the challenge in the last 2 years was credit, because it was extremely tough out there in the economy, and how do we make certain that we're agile and we can make certain that we can manage our risk? And we're creating a platform to grow from. I think the one that surprised the market was our strategic initiatives. The profit contribution of that was ZAR 2.9 billion. Basically, ZAR 1 billion up last year. We brought in new products, new value-added services. We've launched Connect and a big, big focus on digital payments. Then our Insurance business is quite scary. Like I said, 2018, we started with funeral. And now we're sitting with a business that's contributing ZAR 3 billion to our bottom line. And where we've been always in a cell captive structure, we've moved completely away to our own license, and I'll elaborate on that. And we're moving now, making certain that's a company on its own and we're driving that growth opportunities. And then business banking. We bought Mercantile 3 years ago. We had COVID for the first year, we have had to manage and survive in COVID. Nobody knew what's going to happen. Then we've rebuilt it, and we're very pleased that we've rebranded now from the 1st of March, Capitec business, and we're growing that business. I'm very excited what the changes that this business can do for South Africa. I think the question is, what makes us successful? I think the most important thing about this is everyone in Capitec, we believe, should be the CEO, not only myself. Every single person must be the CEO. And as CEOs, clearly, what it stands here. We're client-obsessed, we energize our people and we create ownership from our staff. If I unpack client, I think we've spoken a lot about it but we eat, drink, live client. We think how can we innovate, we think about how we can diversify, we think about how we can disrupt. And it's not only the client experience for one product that you're launching, but it's that end-to-end client experience that you need to use. What happens if there's a complaint? What happens if the financial recourse doesn't play out? Do you make certain that your end-to-end client experience is unique? I think you don't deliver what we've delivered if you don't focus on your people. So you need to make certain that your people are energized. A big focus on talent and bringing in the best-in-class, make certain we've got strong leadership that we develop our own people. It's interesting, 16 of our best people were now through the University of Duke, North Carolina. They were now a week in India. There were 10 days in Singapore, rubbing shoulders with the best in the world, making certain that we think big enough, we think client and how can we actually change and make certain we are the best in class? So that tremendous focus on our own staff. It's interesting. We're currently sitting with about 60% of our people that's employed from within, so they come through the ranks, and we're working now to get that to 80% of our people coming through. And in ownership, we've got the 4 businesses. But I think what you create is if you've got people that run completely on their own, you create silos. But the moment you make certain there's a common goal, common vision, you make certain everything is coordinated and make certain what is the best the company in totality. Clear strategy, clear business plan, but I think the most important, the ability to actually execute on that strategy. We spoke a lot about it. If you go to look at our strategy and other bank strategy is probably the same, client service, digital, IT platforms, et cetera. But so how do you execute on that strategy that makes you a winner? And that, for us, is the most important. If I look at our group results, interesting in August with our half year results. We had growth of 9%. We ended up at 16% tremendous economy that's under tremendous pressure, a 25% growth in the last 6 months. And I think that comes back from where -- how we've diversified, how we've done more different products into the mix. I think a very big improvement on our impairments, where we've dropped down payments on our credit loss ratio from 11% to 9%. And then I think the transactional income up, 29%. But I think the figure that surprised the whole market is that where we've always was seen as a micro lender, where 100% of our income was coming from credit, and you've compared massive risk given the economy. Suddenly, 72% of your income is now coming from other income and only a small portion, 28% of your income is now coming from credit. And the nice thing about if you look at your transactional income, a big portion of that is annuity income that just keeps on growing as you go on. OpEx, up 17% but if you invest in the future, your OpEx will grow. And then I think the other 2 critical areas, if you look at cost income ratio at 36%. Not a lot of banks that can talk about 36%. I see Chris here smiling, he always give me a lot of trouble on 36%. He wants 40% gross -- and then ROE of 26% and a capital adequacy of 36%. And I think then, a figure that stands out for me. If we look at the last 10 years, our cumulative growth of 18% that we've actually achieved over that period with COVID included. So I think we had a very strong performance, if you look at our performance over the last couple of years. I'm going to play a video that just introduce our 4 businesses, and then I will unpack the different businesses. [Presentation]

I'll now start unpacking these 4 divisions and just give some more detail around it. If I look at Personal Banking, it goes for us, all about that unique personal service that we provide in the branches. And I must say, I haven't heard of a client that didn't say it's unique to go into our branches, how quickly, how friendly, how nice is it in our branch. And then the whole move to digital and how digital and a branch actually support each other. So if I look at -- I've got a slide before. I need to brag a little bit. I thought I'm already in the services. If I look at the stats in South Africa, it's quite interesting. If you look at the population Santie talked about, if the Capitec people voted for Capitec, yesterday will be an interesting thing, what would have happened. But Santie [ gave ] some perspective on that. If you're looking at a 61 million population, you're sitting with 22 million clients. So 36% of the clients is actually banking with ourself or using it. Remember, what we're talking about 22 million, that is people that we're actually making an income of, so that's actually active clients. We've signed up about 26 million, 27 million clients over the time. Interesting, if you look at the population between 15 and 64, suddenly, the picture changes because now, we're sitting with 49% market share. 20 million of our clients are actually between that age bracket. So we're starting to get close to that 50%. And hopefully, we can get to that aim of 95% that I've spoken about right at the beginning. And then if I look at the employed age. So I'm looking at people that's employed between 15 and 64, that's about 17 million people, and we've got 7.8 million banking clients. So that's 46% market share in that particular segment. And then what is interesting, if I look at the South African perspective, what is quite interesting is the average income in South Africa. I don't think we always realize that, it's about ZAR 15,000. That's banker-served. Bank served looks at all the salary that's coming in because everyone has got this perspective that in South Africa, people earn quite a lot, but the average is ZAR 15,000 it's actually coming in. And then if you look at [indiscernible] data, people earning more than ZAR 1 million, there's only 290,000 people that owns more than ZAR 1 million. So it gives you a little bit of a perspective of the type of services that you need to offer and make certain that we are unique in the banking sector. If you look at Personal Service, how do we service our particular market? We've basically got 2 models. We've got our branches. And if you look at our branches, now 846 branches. It's been really flat. Everyone asked me, why do we still got branches? Interesting. We're going to increase our branches we have plus/minus about 20 branches this year. We've got 8 branches that's under tremendous pressure that we need to increase the capacity in those particular branches. But what we've seen is we've moved people a way to self-service. But now, our consultants are really there to sell to the client, to connect to the client. So we're sitting with 39 million interactions where we're really making a difference in the branch, and make certain that the client really understand the product and we optimize the client usage. Cash has been fairly flat. We've only grown about 3%. Interesting, we've got about 8,000 DNRs. Everyone asked me about the queues at the ATMs. Believe me, we're trying to break that and to make certain that we haven't got queues and now for the first time, if you withdraw money with ourselves or any other ATM, the fee is exactly the same, encouraging people to actually move away. But some people want to withdraw money at a Capitec ATM. That's brand loyalty. I think the other interesting one is social media. You probably won't know it. But if your phone into our BSC, you think you're chatting to a person, but it's actually a bot on the other side. That's how the world has changed. In February '23, 9% of our calls were answered by a bottle. Now we're talking about 65% of our calls has been answered by bot. If I look at the app. I think the interesting thing is on the app, we know about 11 million clients. But our number of transactions last year was up 49%, 1.7 billion transactions. That's been taking place on the app or 45% of our total spend was on the app. And then what is critical for us on the app is because the person is not coming into the branch. So you don't see the person. So you need to communicate with the person, and that's why our client engagement center are there to make certain that we can engage with that, and that's where we're using AI and machine learning, and sending out over 40 million messages per month to engage with the client and make certain that you fully understands what's happening in a bank. And I think the most important thing is we're sitting with 2 trillion data points that we actually use to optimize the client's life and engaging with our clients over time. If I look at the app, we were by far, the biggest app in South Africa. It's interesting. If you look at the rankings on social media on Google, that's actually only retailers and the social media that's bigger than ourselves. If you take on people that signing on to the app, so we are at #5. We're working on that #1 place, franchisor that you have to work on. But if you look at where we are on the app, you can basically open up a bank account in minutes. And then you've got all the products that's available on the app and you've got over 60 features on the app. I think the scary thing from being about the app, I'm not going to go through it in detail. But there's 500,000 log-ins per hour on the app. And on our peak times, we're working on about 5.5 transactions per second. It is scalable to 12,000, and we can add cloud infrastructure anytime to increase that capacity. We've processed more than 1.2 trillion transactions last year on the app. If I look at the credit environment, that 28% of our business. Yes, we had a tough time last year. I think we were under tremendous pressure in that first 6 months. But I'm glad to say with agility, we're focused on the credit management [indiscernible] in the East team here, making certain that we bring that clear credit loss ratio down. We said it was at 11%. It dropped to 9%. We said through the cycle, it will be at 8.5%, and I can reveal that in April, our figure was an 8.4%. What is interesting is how it's actually shifted. We've got 1.4 million credit lines but a massive shift to people earning more than ZAR 50,000. And then our credit card is up 57%, a big focus on our credit card client base. What we've also done is we've moved away and created more channels for our clients. If you look at our direct lending business, it's now 15% of our business, where a person can phone up and he can be helped over the telephone on for a particular loan. And then on self-service, on the app, growing, we've just launched it about a year, 1.5 years ago. That is growing very strongly. I think the focus area here for me is on the multiple income, people will have more than 1 income, where we actually really see focusing and starting to focus on those people. Not only people that's earning a salary if you've got rental income, if you've got other income streams to see how we can optimize that particular area. And then we're starting to look very strongly at how can we get the purpose lending into home loans, vehicle finance, and improvements. We've got agreements with CTM, Build It and Cashbuild, where people can take up a loan in those organizations, and there's about a 6%, 7% difference as when you take up a purpose lending versus a normal loan at branch. If I go to strategic initiatives. I think the most important thing is we're focusing to get everyone to actually do a payment electronically. We don't want to use cash. Why is that for us important? If you draw ZAR 1,000 in cash, we don't know what you've done with ZAR 1,000. We see the ZAR 1,000. But if you spend ZAR 1,000 electronically, we can see what you've done with every single swipe. And what you can see is electronically, what we're doing is it's ZAR 127 billion per month that has been swiped and 31% of that is in our ecosystem. So it's a Capitec person paying another Capitec person. And what we've done is we've created to make the payments easier. So there's a magnitude of payment options. You've got now new wallets. Five of these things are completely new, new wallets, Samsung Pay, Apple Pay, Google Pay. You've got the new PayShap rails, where we buy, it's much cheaper to actually do a payment through it. You've got international payments. You've got Capitec Pay, and Chris referred to that in the video. So you can see what we're doing is we're trying to make payments as easy as possible for our client base. And what has happened was where we were 90% cash-based. Now only 17% of our transactions are taking place on cash, 83% is taking place on electronic. And the big -- the nice thing about electronic is just not enhancing the client experience, but you can score the client from a credit perspective. If you look at e-commerce, other areas growing very strongly. We're sitting at 4.2 million clients and e-commerce doing about 3.6 billion transactions. And it's quite interesting, if you see who's doing that is that Generation Z and Y, so these people between 13 and that's doing about over 80% of all the transactions and where they're spending their money on. You can see it's a wide variety of items that they spend their money on. Capitec Pay. Jerome is sitting here, he developed it, grew it. We launched it last year. And it's coming from where you've got screen scraping, you need to fill in your card details. You need to verify it. It was very unsecured. The success rate was about 46%. Given Capitec's innovation, our disruption nature, we said we need to do it completely different. And what we're doing now is you click on Capitec Pay, you enter your cellphone, you authenticate it on your cellphone and you do your payment from there. And the success right now is about 84%. And what is quite interesting is we're doing about 15 million to 16 million transactions per month. April was 3 billion transactions that's taken place and 5.1 million clients is actually using Capitec Pay, a tremendous success for Capitec. Then international payments. I don't know if you've seen it. If you're on the app, you can actually do international payments now to 50 countries. We've -- with the majority of the transaction tax plays within 24 hours, completely different to Swift. Swift is normally about 3 days, 87% is within 24 hours and it's a fixed fee of ZAR 175, the lowest in the market. It's interesting. We've just launched it, it's very low key, and we've done ZAR 21 million. So please go in and go try the new Capitec transfers international using your ZAR 1 million allowance. If I look at value-added services. I think if you look at value-added services, not a lot of people actually know that we're doing about ZAR 2.6 billion in airtime and electricity in a month. We control about 30% of airtime and electricity in South Africa. So that gives us a very powerful time to understand what our clients has done. We've launched vouchers and Flexi vouchers. You can see on the left here, whereby you can buy a voucher and send a voucher to a person. You can actually buy a Pick n Pay or Boxer voucher or you can buy a Flexi voucher that you can use it at any one of the 36 retailers that we've launched with. Send cash. An ability to send cash to somebody else to all retailers and to ourselves. We've spent about ZAR 4.8 billion every single month to people. Bill payments where you -- actually, if you want to pay your DST or municipality, you click a button and you do your bill payments. And the one that is for me, quite nice, I enjoyed it. I was one of the first guinea pigs, is your license renewal. If you do for license renewal in your [indiscernible], you just click on it and a day later, your license gets delivered to yourself for ZAR 150, for all your cars included. We've done 70,000 in the first 3 months, which is quite amazing, if you look at your client base. Also, with no promotions. The one that I'm excited about is Capitec Connect. I've mentioned that 60% of [ airtime ] -- 60% of South Africa is on prepaid. So if you look at the prepaid market, 60% is on [indiscernible] market, 8.8 million of our clients is on that. We can see that they are using prepaid. And what we've done is we're launching a new product coming out in end of June. And you can see what we're doing is we're saying to you. No expiry, 1 day, 7 days, 30 days, and then you're paying your fees on it. Disrupting the whole market, making it much more simplistic because what you see is what you pay. And it's not what's happening in the telecommunications space, whether it's the whole time promotions and whole time different offers that's coming through. Very simplistic, very straightforward, and I think this is going to be very successful going forward. Live Better. I think the most important thing is we've started with Live Better. We've given every single client that has got a certain behavior, we've given a 0.5% back on every purchase that they've done. But we suddenly realize if you work at our scale, the retailers don't like us. They don't want to go permanently with us on because it's just getting too big. You can imagine if you're sitting with 22 million clients and 18 million clients are swiping their cards at a particular retail. What is the cost of that? So what we've done is to say, right, we need a new platform. We need to gamify it. We need to have certain specials coming through. We need to encourage people to actually take up our product range and give people vouchers, et cetera, et cetera. And that's all been launched in this coming month. We'll take a look better to a completely different area. If you look at value added. I've spoken about it. I think this is an interesting slide. I don't think there's a lot of people that can say they launch new products, and they add ZAR 1 billion extra to the bottom line. And that's just that power of 22 million clients and 850 branches that you sell through that. You can see the take-up. You can see Capitec Pay, we've made ZAR 192 million out of that. And you can see a lot of vouchers, bill payments, close to ZAR 900 million, that we've made out of those products. And you can see our market share on the right, basically controlling on electricity and data. We're controlling about 30% of the market. Insurance, yes, it's a business already at ZAR 3.1 billion. What is our strategy on it? We were on a cell captive with Guardrisk and Sanlam. I think everyone knows by now, we had a very good partnership with Sanlam but regulatories, requirements has forced us to have our own license. So we're departuring or our contract is ending the first of November. Our partnership was 30-70, 70% to ourselves, 30% to Sanlam. Now though full 100% is going to come through to us from next year. But I think the nice thing is that we can actually now really go and take because they own the futures and benefit of the product and the pricing. Now we can actually go and change it and create our own Capitec value to that particular area. And then we'll launch a new Capitec Life, which I'll cover now. I think the biggest thing, if you look at the insurance business is that nobody actually understand is our advantage of 850 branches and 22 million lines. Because if you talk to the Sanlams and the old Mutuals, they're making -- they're very dependent on agents and in commission because they haven't got the branch network. We've got that infrastructure to actually sell insurance into our client base at a very affordable rate. If you look at Funeral, we've got a market share now of 35% and 12 million clients in South Africa is actually being covered with Funeral. If I move over to Life, and that's a product that we're launching next week or now the week after or month. I have seen Katherine here. 9th of June. A lot of work has gone in it. If you look at Life. It's been sold by a lot of agencies. Nobody is actually focusing on that 1 million to 3 million market or 100,000 to 3 million because I think everyone is looking for that 3 million plus because of the cost of the distribution costs associated with that. What are we going to do? You can see on the right, the person on the app takes on his life cover. He can choose as I'm covering my funeral cost. Am I covering my monthly income to my wife for children? Do I have a lump sum or mature needs? And what is quite nice is we've created a trust company that actually manage it. So if you're saying you look after your children, the trust company will make certain that your children's education is looked after, plus then the cost of living is looked after. So I think that's completely unique. Our premiums will be the lowest in the market. 6, 8 very simplistic questions that we ask. But again, the power lies in using our data. And I think it's the first time that somebody is using transactional data, credit data to optimize the client offer. So we're very excited. We've launched it in our staff, and we've sold 200,000 policies in the first 2 weeks in live. So to me, very interesting to see what happens in that space, but I'm very excited about it. Business Banking. If I look at Business Banking, what is the opportunity? I think everyone knows the opportunity. But if you look at this run about -- everyone talks about between 2 million and 3 million SMEs, and I'm talking formal SMEs contributing about 34% to GDP, but the one that everyone is missing is the emerging market. And if you talk to [indiscernible] he was a specialist that grew up in those particular areas. We work a lot with him. He's estimating that market between 3 million and 5 million emerging markets with estimate turnover of about ZAR 750 billion. That just gives you a power. He estimates -- if you look at our unemployment rate, is around about 32%, 33%. If you bring in the emerging market, it's more like 10%, 11%. And again, think about it. Why are we still peaceful in South Africa? Because there's a very strong emerging market that's just creating economy on its own, and that's where we would like to focus. Very straightforward. What we've done in retail, we've done -- we want to do in business banking. Very simplistic, transparent business solutions for business banking. If I look at Business Banking, I think everyone talks about business banking, but forget about our other 4 divisions as not only 1 division. There are some surprises. So our Merchant Services division, selling point-of-sale machines, rental finance. Financing a different variety of equipment. Payment Services and then ForEx. A very strong ForEx business, whereby we're taking money abroad and bringing money across. So if you look at Business Banking, please look at those 4 divisions. I think if we look at the product, very simplistic single solution, what we've done in retail, everyone gets exactly the same. No differentiation on income, no differentiation on size. Very unique pricing. For the first time that we're saying actually the pricing in retail and business banking is exactly the same apart from the monthly fee, which is ZAR 50. The question is that I always ask, if you do a payment in retailers, ZAR 1; whilst business bank, ZAR 5 or ZAR 10, ZAR 20. The average payment in business banking is around about ZAR 10. We're going to come in, we've already come in at ZAR 1. Just making certain that there's no differentiation between the retail bank and business banking. And they're a very unique service model. We're going to use our branch infrastructure for the emerging markets or for the sole props. We're using our relationship suite, which is already at 150 relationship managers, whereby you can, any time, talk to those people via chat, be it Teams, VR, WhatsApp, talking to relationship manager. He sees -- he or she sees exactly what you're seeing. So that's side-by-side consulting, exactly the same in that particular area. And then we've got about 20 business centers across [indiscernible] looking at businesses at ZAR 20 million and higher focusing on that segment. Our focus will be on ZAR 100 million below but predominantly focusing on the emerging markets. Interesting, when we started retail banking, 60% of South Africans were unbanked. If I look at the emerging markets, 60% of those people are unbanked. Our mission is to go unbank the emerging market and unlock the potential in South Africa. I'm also quite exciting about this initiative. Our merchant services side, our point-of-sale side. Currently, these are the 2, the Pro and the print. The Print is about ZAR 4,200. The Pro is about 2,400 you can actually now sit -- go on to the web and this gets to your order and it gets delivered for you tomorrow. And you can then start doing transactions because we believe we can disrupt the whole point-of-sale market because what we're going to offer is a very aggressive pricing that's gone in from 1st of June. And you can see the pricing here on debit cards. I'm just going to touch on debit cards. If you are doing a turnover below 500,000, you're going to pay 0.85%. And if you go over 1 million, you're going to pay 0.6%. It's by far the lowest in the market. You all settled immediately into your account, and then you'll have your business bank account. On top of that, with those fees to make certain that we understand that data. And then from there on, we will start moving and providing a personal loan for the person. Because all of them hasn't got assets, so you need to actually look at cash flow lending to make certain that you can provide lending solutions to those. So this we've launched, and I think it's going to be exciting to see what happens in this particular [indiscernible] Well, we had the question on ESG. And I'm going to answer that. If you look at what we're spending on it, it's just over ZAR 200 million that we spent last year on it. So it's a very big number. If I look at what we're doing, and I'm not going to go into the detail, but the one that excites me is the one on the left. We've started off by giving a lot of [indiscernible] into children but quickly realized, but they don't understand what's really happening. And we said we need to fix the school from the top. So we've taken the Head Master and actually put them through MBA for a year, make certain he can manage the school, take on the Math and Science teachers and make certain that they are equipped, and then work with that school and educate the school. And it's interesting. If you look at the success rates, it was about 35%, 36%. Those schools are running 70%, 80%, 90%. And then the consumer integration where we're spending a lot of time on people, especially in these tough economic times. How do you budget? How do you make certain you can manage your financial lives? And we've got over 700,000 people that we have educated in last year on it. And the one on the right is looking at supply development where we spent over ZAR 280 million on supply development, working with BEE people to make certain that we can encourage them to grow their businesses and grow going forward. Avafin, yes, I think probably the surprise for everyone. We bought Avafin in 2017. We acquired 40% of it. And then we said, but we understand what's happened. We've got a very strong management team in Avafin, a very strong CEO that's grown the business tremendously lately. And we believe there's a massive opportunity for ourselves from a funding perspective, later on putting a banking license on top of it, and growing that business on an international scale. We've paid roughly about ZAR 500 million for our stake in it on a PE of about 4%. So I think it's a very good acquisition. I've seen their profit figures for the last 3 months, and I'm quite happy. So a lot of opportunities in it. We're operating in Mexico, Spain, Poland, Czech and Latvia, and we can also operate in other countries as well. But this just gives us that opportunity to grow our business going forward and diversify our business. I think the big question that everyone asks is,"You grow"? And one of the nightmares we've got in IT space is you grow your transactions for 30% per year. So you can imagine every year, you add 30% to it, where how quickly you double, you basically double every 2.5 years. And how do you keep up with that pace? And how do you make certain that you can cope with those volumes? I think what we must understand, we've made a deliberate strategy 3, 4 years ago to work with the best in the world. So we've worked with AWS, Amazon Cloud, 70% of our architecture is in cloud. We're sitting with a cloud sales force that's taken over all our call centers. We've got full client history of the client base. So if you spoken to ourself, we can understand what was your previous engagement and then come up with what is the best actions. What is interesting to replatform our own BSC with our own people would probably have taken us 5 years, if you do it yourself. If you do it with Salesforce, we basically now -- we started in January, we will be finished by the end of this year. Just giving you the power of these big companies that comes in to help you to speed up your operations. And we are SAP-based and Microsoft is other partner. What does that enable us? It enables us to take all our developers, and we've got close to 1,500 developers to actually focus on our products and our [indiscernible] needs and to be quicker to market. So it's a big focus from building and maintaining, to making certain that we can focus on our own people. And then the whole journey on data, making certain that we understand data and we run data. We said we were a bank, then IT company, and now we're becoming a data company making certain that we understand that to optimize data. We've moved everything to the cloud. We've got over 42 predictive models. Our whole credit model is running on machine learning. And it's interesting, these things are about 80% to 90% faster than the old models, and we can go to market much quicker. And then we've really started to use AI across the bank not only in the beginning phases, but we believe there's a massive opportunities in AR space. Just think about it. We've added a massive amount of products and futures into our -- for our consultants. They can't remember every single thing. But now with AI, it's a click of a button, and we can give them the right information to make certain they give the right information to our clients, and make certain that they connect to our clients. Our aspirations. There's a saying that says, "If you dream, it doesn't scare you, you don't dream high enough." So what is our aspiration? I think our aspiration, or I think this is our aspiration in the next 5 years, is to really realize the full potential of South Africa and to optimize the whole ecosystem that we've created. Insurance, strategic initiatives, business banking, retail to optimize that and really unlock the potential of the emerging markets that we can really get South Africa to grow. I don't believe the government is going to do it. The private sector is not going to do it. The entrepreneurs need to do it. And we're sitting with a massive amount of entrepreneurs in the emerging markets that can unlock the potential in South Africa. And then if we've done that, then it's time to build a leading global brand, a Capitec International, and make certain we take up our space in the international world. From my side, thank you very much. Our special thanks to Santie and the Board for their support, what they've done to my ExCo team, our management team, our own staff. We don't do what we've done if it isn't because of our staff and what's taking place. So thank you very much from my side. We've changed the format slightly. In a sense, you can see there, there's 4 cubicles where we will handle the personal side and retail side strategic initiatives, Business Banking, Insurance, as well as our social impact in financial education. So if you've got any questions, my staff will be here. So you can take any time, talk to any one of those people and ask questions about the bank. From my side, I think it's now time for wine. So I am thirsty, so enjoy the afternoon. Thank you very much.