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9 February 2016

Share Information Share Code CPI Capitec Holdings Industry Banking Market Capital (ZAR) 58 160 376 473 Capitec Bank is ’s fastest growing retail bank. Capitec provides accessible and One Year Total Return 33.3% affordable banking facilities to clients via the innovative use of technology in a manner which Return Year-to-date -5.1% is convenient and personalised. Current Price (ZAc) 50300 52 Week High (ZAc) 61000 52 Week Low (ZAc) 38450 Financial Year End February Trading Statement

Capitec released a trading statement for the full year ending 29 February 2016: Share Price Performance • Headline earnings per share are expected to increase by between 23% and 27% y/y. 200 • This is tracking ahead of full year expectations (consensus: +22%). 170

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50 • This was another good outcome and while we recognise that this is quality operation, Feb-15 Jul-15 Dec-15 Capitec does not appear particularly cheap on a forward PE of 15.7 times and a forward Capitec FTSE™/JSE™ Africa Index™ dividend yield of 2.6%. We continue to prefer FirstRand and in the sector. Figure 1 Capitec One Year Share Price Performance versus the FTSETM/JSETM Africa BanksTM Index (rebased) Source: I-net Bridge, FNB Securities Calculations Bull and Bear Points

What we like about this company What we don’t like about this company Updated Results Summary • Targeting the unbanked population in • Very low free float (24.08% of the South Africa - still plenty of growth oppor- company is owned by the Board and 2015 2016(E) 2017(E) tunities in this area. Senior Management, PSG owns 34.83% HEPS (ZAc) 2206 2691.3 3203 DPS (ZAc) 836 1045 1299 and 15.83% is held by BEE partner). P/E 22.8 15.7* 12.9** • Its target market has expanded in recent • Its target market has expanded in recent D/Y (%) 1.7 2.6* 3.0** years with middle income individuals also years with middle income individuals wanting to take advantage of its competi- also wanting to take advantage of its Source: I-net Bridge, FNB Securities Calculations tive fees and deposit rates. * 12 months forward competitive fees and deposit rates. ** 24 months forward • The bank has a relatively simple business • Increased competition from traditional model free of complicated hedging strate- retail banks as they begin to wake-up gies. This makes the bank less exposed to the fact that growth lies in the lower to tighter banking regulations. LSMs. • Flexible banking platform which will make Analysts expansion into other banking areas easy - Capitec is planning to launch a Mark Appleton service soon. Thabiso Mamathuba Pritu Makan Contact us Relationship manager: +27 11 282 4561 Dealing desk: +27 11 282 8734 Website: www.fnbsecurities.co.za

Head Office:4 Merchant Place, 1 Fredman Drive, Sandton 2196 | PO Box 3359, Parklands 2121 | [email protected] | www.fnbsecurities.co.za Relationship Manager: +27 11 282 4561 | Dealing Desk: +27 11 282 8734

Directors: H Mojalefa, PP Dreyer, R Jayrajh, W Myers, V Naidoo. Company Secretary: C Low

FNB Securities (Pty) Ltd - a part of the FirstRand Group. An Authorised user of the Johannesburg Stock Exchange (JSE) and Provider (FSP182). Competitive Position

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Capitec First Rand

Figure 2 Key Comparative Metrics - Capitec versus FirstRand Source: I-net Bridge, FNB Securities Calculations

Disclaimer: The valuations, calculations, prices, opinions and all other information (the “information”) contained in this document is issued by FNB Securities (Pty) Ltd (Reg no: 1996/011732/07) (“FNB Securities”) - a part of the FirstRand Group. An Authorised user of the Johannesburg Stock Exchange (JSE) and Financial Services Provider (FSP182). Whilst all care has been taken in the provision of the information in this document, this information is provided without liability to us, our affiliates or any officers or employees of ours. The information expressed in this document is done in good faith and is not intended to constitute any form of advice, including but not limited to financial, legal or tax advice. Some of the information may have been provided or sourced from third parties and we do not in any way guarantee its accuracy or correctness. At all times we will endeavour to ensure that information obtained from any third party is accurate and reliable. FNB Securities and its affiliates disclaims and assumes no liability for any loss or damage (direct, indirect or consequential) that may be suffered from using or relying on the information contained herein. Investment in shares may cause exposure to certain risks, including market risk, and may therefore not be suitable for all clients. Please contact your relationship manager for a personal financial analysis prior to making any investment decisions. FNB Securities and its affiliates disclaims and assumes no liability for any loss or damage (direct, indirect or consequential) that may be suffered from using or relying on the information contained herein without seeking professional advice. All rights in the FTSE/JSE Africa Index Series vest in the JSE and in FTSE International Limited (“FTSE”) jointly. FTSE™ is a trade mark of the London Stock Exchange Group of Companies (“LSE”). JSE™ is a trade mark of the JSE.