DOCSLIB.ORG

People, Passionately Delivering on Clients' Needs

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
People, Passionately Delivering on Clients' Needs CAPITEC BANK HOLDINGS LIMITED HOLDINGS BANK CAPITEC INTEGRATED ANNUAL REPORT 2019 REPORT ANNUAL INTEGRATED people, passionately delivering on clients’ needs Integrated Annual Report 2019 people, passionately delivering on clients’ needs In 2019, we have a bank with 13 774 employees, 840 branches and 11.4 million clients. Our fundamentals make banking simple, accessible, affordable and personal for everyone. We value relationships and increasingly engage on social platforms with our stakeholders. We believe in doing business responsibly. This is reflected in how we deliver our Global One solution and who we employ. We focus on building a strong talent pipeline and appoint people for their potential. We take responsibility for their training and development. We are developing fun, digital and educational ways to increase financial literacy for clients and employees. We won the latest awards for the top South African bank, the most loved bank and the most innovative brand, among others. Our Global One solution remains simple and transparent: transact, save, insure and credit. Our operating environment continues to be shaped by a challenging economic landscape. The unsecured credit market remains active and well regulated. We implemented the new IFRS 9 Accounting Standard. In terms of risk management, we have clearly defined roles, responsibilities and policies. Our motivation remains to create sustainable value for all our stakeholders. This report is about Capitec Bank Holdings The glossary explains some of the words, Limited (Capitec), which is listed on the expressions, acronyms and abbreviations used in JSE. It owns the operating subsidiary Capitec this report Bank Limited (Capitec Bank). Capitec Bank is Banking is simple. To write about banking and adhere a leading South African retail bank that focuses to all the regulations and frameworks for reporting, on essential banking services and provides means that we use words, expressions, acronyms innovative transaction, savings, insurance and and abbreviations that might not always be easy to unsecured lending products to individuals. understand. There is a glossary in the appendices Capitec’s mission is to make banking simple and that explains some of these. transparent to help clients – regardless of their Get in touch – we want to hear from you level of income or assets – improve their financial lives through a single solution, called Global One. If you would like to know more about us, please visit our website www.capitecbank.co.za. If you want to suggest improvements to this report, email us at What to know when you read this report [email protected]. We do regular Forward-looking statements are not guarantees investor and results presentations. If you would like to know about these, or attend, send your contact details In this report, certain statements (words such as “anticipates”, to [email protected]. “estimates”, “expects”, “projects”, “believes”, “intends”, “plans”, “may” “will” and “should” and similar expressions) are forward-looking. These relate to, among other things, the plans, objectives, goals, strategies, future operations and performance of Capitec. These statements are not guarantees of future operating, financial or other results and involve certain risks, uncertainties and assumptions. Actual results and outcomes may differ materially from those expressed in or implied by such statements. The Capitec board has given the report their stamp of approval The board takes responsibility for overseeing the integrity and completeness of this report. The board members collectively applied their minds to the preparation and presentation of this report. The board and the audit, human resources and remuneration (REMCO) and the social and ethics committees considered the accuracy and completeness of this report and are satisfied with the reliability of all data and information. There are tools to help you navigate through the report Because this report is integrated, you will find different levels of information that relate to the same subject in different sections of the report. We use page references as shortcuts to help you find these connections. Key performance indicators 4 Leadership reviews 6 The Capitec Way 29 Our business context 62 Our strategic goals and insights 70 Leadership teams and governance oversight 74 Risk management report 88 Remuneration report 116 Social responsibility 135 About this report 141 Appendices 142 Annual financial statements 146 Statutory information 242 Key performance Leadership The Our business Our strategic goals Leadership teams and indicators reviews Capitec Way context and insights governance oversight key performance indicators Change % 2019 2018 2019/2018 2017 2016 Profitability Interest income(2) R’m 15 501 15 474 0 14 934 13 413 Net loan fee and insurance income(3) R’m 1 507 1 380 9 495 (83) Total lending, investment and insurance income less loan fee expense(2)(3) R’m 17 008 16 854 1 15 429 13 330 Interest expense R’m (4 510) (4 184) 8 (3 552) (2 884) Net lending, investment and insurance income(2)(3) R’m 12 498 12 670 (1) 11 877 10 446 Net transaction fee income R’m 6 464 5 127 26 3 923 3 020 Other R’m 3 (1) – (1) Funeral income(4) R’m 54 – – – Income from operations(2)(3)(4) R’m 19 019 17 796 7 15 800 13 465 Credit impairment charge(2)(8) R’m (4 450) (5 280) (16) (5 121) (4 401) Net income(2)(3)(4)(8) R’m 14 569 12 516 16 10 679 9 064 Income from associates R’m 2 3 (33) – – Operating expenses R’m (7 494) (6 364) 18 (5 439) (4 591) Income before tax(2)(3)(4)(8) R’m 7 077 6 155 15 5 240 4 473 Tax (3)(4) R’m (1 781) (1 685) 6 (1 434) (1 244) Preference dividend R’m (9) (12) (25) (16) (16) Discount on repurchase of preference shares R’m (2) – – – Earnings attributable to ordinary shareholders Basic R’m 5 285 4 458 19 3 790 3 213 Headline R’m 5 292 4 461 19 3 793 3 222 Net transaction fee income to net income % 44 41 37 33 Net transaction fee income to operating expenses % 86 81 72 66 Cost-to-income ratio(2) % 39 36 34 34 Return on ordinary shareholders equity % 28 27 27 27 Earnings per share Attributable cents 4 571 3 855 19 3 278 2 779 Headline cents 4 577 3 858 19 3 281 2 787 Diluted attributable cents 4 562 3 843 19 3 267 2 773 Diluted headline cents 4 568 3 846 19 3 270 2 781 Dividends per share Interim cents 630 525 20 450 375 Final cents 1 120 945 19 800 680 Total cents 1 750 1 470 19 1 250 1 055 Dividend cover x 2.6 2.6 2.6 2.6 Assets Net loans and advances R’m 44 515 40 927(1) 9 39 205 35 760 Financial instruments at amortised cost(5) R’m 49 208 39 387(1) 25 30 605 24 989 Financial assets – equity instruments at FVOCI (Available-for-sale financial assets) R’m 100 100 0 100 Other R’m 4 723 3 139 50 2 988 1 794 Current income tax asset R’m 286 –(1) – 53 Deferred income tax asset R’m 1 596 1 168 (1) 37 460 349 Total assets R’m 100 428 84 721(1) 19 73 358 62 945 Liabilities Retail deposits and wholesale funding R’m 76 443 64 030 19 55 582 47 940 Other R’m 2 309 2 447(1) (6) 1 658 1 346 Total liabilities R’m 78 752 66 477(1) 18 57 240 49 286 Equity Shareholders’ funds R’m 21 676 18 244 (1) 19 16 118 13 659 Capital adequacy ratio % 34 35(1) 34 35 Net asset value per ordinary share cents 18 676 15 681(1) 19 13 809 11 6 6 3 Share price cents 130 621 83 246 57 72 500 47 400 Market capitalisation R’m 151 033 96 255 57 83 830 54 807 Number of shares in issue ’000 115 627 115 6 2 7 115 6 2 7 115 6 2 7 Share options Number outstanding ’000 640 777 (18) 963 868 Number outstanding to shares in issue % 0.6 0.7 0.8 0.8 Average strike price cents 50 644 38 561 31 31 755 28 520 Average time to maturity months 18 19 20 27 4 | Capitec Bank Holdings Limited Risk management Remuneration Social About this Appendices Annual financial report report responsibility report statements Change % 2019 2018 2019/2018 2017 2016 Operations Branches 840 826 2 796 720 Employees 13 774 13 333 3 13 069 11 4 4 0 Active clients ’000 11 386 9 868 15 8 569 7 269 ATMs and DNRs Own 2 090 1 895 10 1 653 1 236 Partnership 2 921 2 750 6 2 371 2 469 Total 5 011 4 645 8 4 024 3 705 Capital expenditure R’m 1 141 829 38 1 000 704 Credit sales Value of credit card disbursements/drawdowns R’m 6 193 3 949 57 864 Value of term loans advanced R’m 24 775 24 343 2 26 362 24 228 Value of total loans advanced(10) R’m 30 968 28 292 9 27 226 24 228 Number of total loans advanced(6) ’000 4 889 3 947 24 3 508 3 684 Average of total credit card disbursements/drawdowns R 1 974 2 296 (14) 3 703 – Average of total term loans advanced R 14 145 10 934 29 8 051 6 577 Average of total loans advanced R 6 334 7 168 (12) 7 761 6 577 Credit book Gross loans and advances R’m 54 879 47 642 15 45 135 40 891 Up-to-date Stage 1 R’m 41 587 37 165(1) 12 39 076 34 527 Up-to-date with SICR Stage 2 R’m 3 765 4 401(1) (14) Total up-to-date R’m 45 352 41 566 (1) 9 39 076 34 527 Arrears – up to 1 month in arrears Stage 2 R’m 1 087 1 003 8 1 641 1 458 Arrears – 2 and 3 months in arrears Stage 3 R’m 1 389 1 697(11) (18) 1 214 839 Total arrears up to 3 months R’m 2 476 2 700 (8) 2 855 2 297 Application for debt review within 6 months Stage 3 R’m 70 108(1)(11) (35) Up-to-date that rescheduled from up-to-date (not yet rehabilitated(7)) Stage 3 R’m 856 1 085 (21) 1 088 1 818 Up-to-date that rescheduled from arrears (not yet rehabilitated(7)) Stage 3 R’m 1 272 1 277 (0) 1 583 1 542 Total up-to-date that rescheduled (not yet rehabilitated(7)) R’m 2 128 2 362 (10) 2 671 3 360 More than 3 months in arrears and legal status Stage 3 R’m 4 853 – – – Expected recoveries receivable(8) Stage 3 R’m – 906 (100) 533 707 Total provision for credit impairment R’m 10 364 6 715 (1) 54 5 930 5 131 Net loans and advances R’m 44 515 40 927(1) 9 39 205 35 760 Total provision for credit impairment to stage 3 (excluding expected recoveries receivable) and stage 2 (up to 1 month in arrears) coverage % 109 130 (1) 107 91 Repayments R’m 38 100 35 974 6 33 236 29 388 Gross credit impairment charge(2) R’m 4 917 6 560 (25) 6 246 5 255 Bad debts recovered(8) R’m 467 1 280 (64) 1 125 854 Net credit impairment charge(2) R’m 4 450 5 280 (16) 5 121 4 401 Net credit impairment charge(2) to average gross loans and advances % 8.7 11.
Load more

Recommended publications
  • The Study of the Emergence of Entry-Level Bank Branches in South Africa
    The Study of the Emergence of Entry-level Bank Branches in South Africa Final Report July 2013 The Study of the Emergence of Low Cost Bank Branches in South Africa Date: 2013/06/21 Contact Information Genesis Analytics (Pty) Ltd Office 3, 50 Sixth Road Hyde Park, 2196, Johannesburg South Africa Post to: PO Box 413431, Craighall, 2024 Johannesburg, South Africa Tel: +2711 994 7000 Fax: +2711 994 7099 www.genesis-analytics.com Authors Darrel Orsmond Kalila Mackenzie Tholoana Mokoena Craig van Rensburg www.genesis-analytics.com Covering Letter / Forward The Centre for Financial Regulation & Inclusion The Vineyards Office Estate Farm Farm 2, Regent House 99 Jip de Jager Drive Belville Cape Town South Africa 7530 Attention: Mia Thom Dear Mia, It is with great pleasure that we send to you the final report on the emergence of low-cost bank branches in South Africa. Sincerely Genesis-Analytics Team Table of Contents EXECUTIVE SUMMARY ................................................................................ I 1. INTRODUCTION ...................................................................................... I 2. THE SHIFTING BANKING LANDSCAPE ............................................... II 3. ENTRY-LEVEL BANKING STRATEGIES ............................................. III 4. EMERGING TRENDS ............................................................................. IV 5. KEY FINDINGS: COMMON ELEMENTS OF AN ENTRY-LEVEL BANKING STRATEGY ........................................................................... VI 6. CONSIDERATIONS
    [Show full text]
  • A STRATEGIC ANALYSIS of CAPITEC BANK LIMITED WITHIN the SOUTH AFRICAN BANKING INDUSTRY by Michael Coenraad De Lange
    A STRATEGIC ANALYSIS OF CAPITEC BANK LIMITED WITHIN THE SOUTH AFRICAN BANKING INDUSTRY By Michael Coenraad de Lange Submitted in partial fulfilment of the requirements for the degree of MAGISTER IN BUSINESS ADMINISTRATION at the Nelson Mandela Metropolitan University Business School Research Supervisor: Prof JA Jonker November 2013 DECLARATION I hereby declare that the above-mentioned treatise is my own work and that it has not previously been submitted for assessment to another University or for another qualification. I further declare that I followed all the applicable ethical guidelines in the conducting the research. Signed: Michael de Lange Date: November 2013 i ACKNOWLEDGEMENTS This research study would not have been possible to complete without the valuable contributions and support of the following people: To my research supervisor, Professor Kobus Jonker, for his dedication, support and professional advice in helping me complete this study; To my girlfriend Jess, for all her understanding and willingness, her support, undying love and dedication in helping me throughout the duration of my MBA; To my family, for believing in me and providing the necessary support and for raising me to be a dedicated and disciplined individual in order to reach my goals and complete this research study. DEDICATION This research treatise is dedicated to my late father who tragically passed away last year. He was an inspiration to us all and my hero. Gone but never forgotten. Thank you Dad. ii ABSTRACT The South African banking industry is well regulated and oligopolistic by nature. The financial sector in South Africa is of a world class standard, comparing favourably to that of developed economies i.e.
    [Show full text]
  • Ratings on Eight South African Financial Institutions Lowered Following Similar Action on Sovereign
    Ratings On Eight South African Financial Institutions Lowered Following Similar Action On Sovereign Primary Credit Analysts: Matthew D Pirnie, Johannesburg (27) 11-214-4862; [email protected] Samira Mensah, Johannesburg (27) 11-214-4869; [email protected] Kuziva Murigo, Johannesburg +27 11 214 4866; [email protected] • On Nov. 24, 2017, we lowered our long-term foreign currency ratings on South Africa to 'BB' from 'BB+'. • We do not rate financial institutions in South Africa above the foreign currency sovereign ratings, given the direct and indirect impact that sovereign distress would have on domestic banks' operations. • As a result, we are lowering our ratings on six financial institutions and two bank holding companies operating in South Africa. JOHANNESBURG (S&P Global Ratings) Nov. 29, 2017--S&P Global Ratings said today that it had lowered its ratings on six South Africa-based financial institutions and two related holding companies, as well as its national scale rating on the domestic medium-term note (MTN) program issued by BNP Paribas through its local branch. Specifically, the rating actions are as follows: • Capitec Bank Ltd.: We lowered the long-term issuer credit rating to 'BB' from 'BB+' and affirmed the 'B' short-term issuer credit rating. The outlook is stable. We also lowered our long-term South Africa national scale rating to 'zaAA-' from 'zaAA' and affirmed the 'zaA-1+' short-term national scale rating. • FirstRand Bank Ltd.: We lowered the long-term issuer credit rating to 'BB' from 'BB+' and affirmed the 'B' short-term issuer credit rating. The outlook is stable.
    [Show full text]
  • Programme Memorandum
    0 Programme Memorandum (Incorporated with limited liability in South Africa under registration number 1980/003695/06) ZAR 2 000 000 000 Domestic Medium Term Note Programme Issuer Arranger, Lead Manager and Sponsoring Member Dealers Legal Advisers to the Issuer Legal Advisers to the Arranger This Programme Memorandum is dated 25 April 2008 1 PROGRAMME MEMORANDUM CAPITEC BANK LIMITED (Incorporated with limited liability in South Africa under registration number 1980/003695/06) ZAR2 000 000 000 Domestic Medium Term Note Programme Under this ZAR2 000 000 000 Domestic Medium Term Note Programme (the “Programme”), Capitec Bank Limited (the "Issuer") may from time to time issue notes of any kind (the "Notes"). Capitalised terms used below are defined in the terms and conditions contained in the sections of this Programme Memorandum headed "Terms and Conditions of the Unsubordinated Notes, Tier 2 Notes and Tier 3 Notes" and "Terms and Conditions of the Tier 1 Notes". Save where expressly otherwise provided, references in this Programme Memorandum to the “Terms and Conditions” are, in the case of Tier 1 Notes, to the terms and conditions contained in the section of this Programme Memorandum headed "Terms and Conditions of the Tier 1 Notes" and, in the case of any other Notes, to the terms and conditions contained in the section of this Programme Memorandum headed "Terms and Conditions of the Unsubordinated Notes, Tier 2 Notes and Tier 3 Notes". Save as set out this Programme Memorandum, the Notes will not be subject to any minimum or maximum maturity and the maximum aggregate Principal Amount of all Notes from time to time outstanding will not exceed ZAR2 000 000 000.
    [Show full text]
  • The South African Reserve Bank's Assessment of Systemic Risk in The
    Introductory remarks by Francois Groepe, Deputy Governor of the South African Reserve Bank, at the Financial Stability Forum and release of the first edition of the Financial Stability Review for 2018 South African Reserve Bank, Pretoria 25 April 2018 Members of the press, guests and colleagues, ladies and gentlemen. Welcome to the release of the first edition of the Financial Stability Review (FSR) for 2018. The FSR has been published twice a year since 2004. Through this publication, the South African Reserve Bank (SARB) communicates its assessment of systemic risk in the domestic financial system. Your presence at this Financial Stability Forum is appreciated, as the forum intends to encourage informed debate on, and therefore to enhance the understanding of, the complex and challenging matters related to financial stability. Consensus is growing globally that regulatory frameworks should focus more on mitigating the risks to the financial system as a whole, as significant risks can build up and threaten the stability of the financial system while individual financial institutions seem stable and sound. In pursuing this goal, the Financial Sector Regulation Act 9 of 2017 (FSR Act) confers on the SARB an explicit statutory mandate to protect and enhance financial stability. The SARB and National Treasury have consequently developed new legislation that will facilitate the orderly resolution of systemically important financial institutions that are failing, which is an important pillar of the SARB’s expanded mandate. This legislation will be effected through amendments to the FSR Act. A key component of the resolution framework is the establishment of an explicit deposit insurance scheme for banks in order to protect depositors from losses in the event of a bank failure.
    [Show full text]
  • Briefing to the Standing Committee on Finance 30 May 2018
    Briefing to the Standing Committee on Finance 30 May 2018 FOLLOW-UP BRIEFING ON CAPITEC BANK LIMITED Agenda – Capitec related issues to be followed up upon during the 30 May 2018 SCOF meeting 1. Responses to Capitec’s written responses since the 20 March meeting & Capitec’s response to the most recent Viceroy report. 2. The role of different regulators and their work on Capitec and VBS Mutual Bank. “1. Responses to Capitec’s written responses since the 20 March meeting & Capitec’s response to the most recent Viceroy report.” . The FSCA has noted Capitec’s written responses to the SCOF. The FSCA has also noted publications made subsequent to 20 March 2018, for example: 27 March 2018 - Capitec: Quarterly Disclosure In Terms Of Regulation 43 of The Regulations Relating To Banks. - Capitec: Summarised Audited Financial Statements For The Year Ended 28 February 2018. 24 April 2018 - Capitec: Integrated Annual Report, Notice of Annual General Meeting And No Change Announcement. 21 May 2018 - Viceroy: Open letter to Capitec’s Audit Committee (dated 16 May 2018) – 6 questions. 24 May 2018 - Capitec: Response from Capitec’s Audit Committee to Viceroy’s open letter. Capitec has kept the FSCA appraised of the status of the court cases which Viceroy claim will lead to Capitec being ordered to refund R12.7bn of multi-loan initiation fees. STATEMENTS All statements relating to Capitec or its securities, including the most recent that were published during May 2018, must be evaluated to establish whether it was: • False, misleading or deceptive, • In respect of a material fact, and • Whether the person who published the statement knew / ought reasonably to have known that it was false, misleading or deceptive.
    [Show full text]
  • Schedule of Investments (Unaudited) Ishares MSCI Total International Index Fund (Percentages Shown Are Based on Net Assets) September 30, 2020
    Schedule of Investments (unaudited) iShares MSCI Total International Index Fund (Percentages shown are based on Net Assets) September 30, 2020 Mutual Fund Value Total International ex U.S. Index Master Portfolio of Master Investment Portfolio $ 1,034,086,323 Total Investments — 100.4% (Cost: $929,170,670) 1,034,086,323 Liabilities in Excess of Other Assets — (0.4)% (3,643,126) Net Assets — 100.0% $ 1,030,443,197 iShares MSCI Total International Index Fund (the “Fund”) seeks to achieve its investment objective by investing all of its assets in International Tilts Master Portfolio (the “Master Portfolio”), which has the same investment objective and strategies as the Fund. As of September 30, 2020, the value of the investment and the percentage owned by the Fund of the Master Portfolio was $1,034,086,323 and 99.9%, respectively. The Fund records its investment in the Master Portfolio at fair value. The Fund’s investment in the Master Portfolio is valued pursuant to the pricing policies approved by the Board of Directors of the Master Portfolio. Fair Value Hierarchy as of Period End Various inputs are used in determining the fair value of financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows: • Level 1 – Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that the Fund has the ability to access • Level 2 – Other observable inputs (including, but not limited to, quoted prices
    [Show full text]
  • Customer Satisfaction Survey 2014 Final Report
    Customer Satisfaction Survey 2014 Final Report Version: v1.00 Date: February 2015 Author: Redflank BANKSETA Customer Satisfaction Survey APPROVALS Sign-off signifies acceptance of the content. Conditional signature can be made, with space provided to express conditions. Name Designation Organisation Date Signature Conditions/Comments Zandile Skosana Manager: BANKSETA Marketing and Communications 2 BANKSETA Customer Satisfaction Survey Contents Table of Figures ....................................................................................................................................... 4 List of Tables ........................................................................................................................................... 5 List of Acronyms ...................................................................................................................................... 6 1. Executive Summary ......................................................................................................................... 7 1.1. Introduction ............................................................................................................................ 7 1.2. Research Design ...................................................................................................................... 7 1.2.1. Overview of Data Collection Process .............................................................................. 7 1.3. Key Findings ...........................................................................................................................
    [Show full text]
  • Shaping the Bank of the Future South African Banking Survey 2013
    Shaping the bank of the future South African banking survey 2013 www.pwc.co.za/banking Contents Foreword 4 Executive summary 6 Introduction 12 Evaluating trends shaping the industry and banks’ responses 16 1 External developments 16 2 Macro trends 34 3 Internal responses 44 4 Stakeholder expectations 58 5 Level of preparedness 66 Appendix 1: Peer analysis 76 Appendix 2: Additional survey results 84 Appendix 3: Research methodology 88 Appendix 4: BA 900 data 90 Contacts 98 PwC | 3 Foreword 4 | Shaping the Bank of the Future We are pleased to launch the 13th edition of the PwC survey on banking in South Africa – Shaping the bank of the future. The banking industry is dynamic and has evolved significantly since our last survey in 2011 as banking chief executives have adapted their strategies in response to regulatory changes and global economic pressures. Our aim is to highlight the challenges and opportunities faced by CEOs as they position their banks to succeed in the future. We also explore industry trends to provide perspectives on how banking in South Africa may evolve over the next three years. We have grouped these challenges and opportunities faced by banks into four broad themes, namely external developments, macro trends, internal responses and stakeholder expectations. Central to all themes is how CEOs are planning to maintain asolid return on equity given the challenges they are facing. Our foremost findings include: • External developments: Regulatory reform coupled with an uncertain economic environment remains the most pressing issue facing CEOs; • Macro trends: The rise and interconnectivity of emerging markets is a significant opportunity for our banks; • Internal responses: Cost containment, leveraging technology in all aspects of banking and a renewed focus on being client centric are some of the internal tactics CEOs are using to stay on top; and • Stakeholder expectations: Although CEOs are positive about their ability to adapt, ROE levels will be lower than in the past.
    [Show full text]
  • Capitec Bank Transforms In-Branch Customer Experience and Efficiency with Verint
    Capitec Bank Transforms In-Branch Customer Experience and Efficiency with Verint Opportunity Solutions Capitec is the largest retail bank in South Africa, with over 11.5 million clients. The bank’s Verint® Workforce portfolio of services includes transactional accounts, savings plans, a credit card, loans and Management™ funeral insurance. The bank operates a network of over 840 branches across South Africa, supported by a team of over 11,000 in-branch professionals. With such a large footprint, accurately forecasting staff workloads and scheduling the appropriate resources to meet in-branch customer needs is a challenging task. “We relied on a mixture of whiteboards and spreadsheets to solve forecasting and staffing problems,” explains Karl Senekal, Forecasting and Scheduling technology team leader at Capitec. “It was like reading yesterday’s weather forecast. Forecasting and scheduling processes Industry were manual, slow, and labour-intensive.” Financial Services Karl and his team used regression models based on the previous 90 days data, calculating future forecasts and staff needs based on historical volumes. Contributing to the inaccuracy of these forecasts, there was an ever-present threat that a branch may not be adequately staffed to cope with a sudden spike in customer demand, in turn impacting customer satisfaction. Moreover, too many resources deployed in the branch during a lull in demand would frustrate staff who might otherwise have taken time off. Staff scheduling was also absorbing significant resources. Branch managers devoted half of each working day to complete schedules – time that better focused on service quality and Region customer engagement. South Africa “The whiteboard was a jumble of names, times, and dates,” says Karl.
    [Show full text]
  • South Africa Banking Sector 2021 Outlook: Sahil Tribhowan Benjamin Young Still Beset by Pandemic Woes Feb
    Samira Mensah Trevor Barsdorf South Africa Banking Sector 2021 Outlook: Sahil Tribhowan Benjamin Young Still Beset By Pandemic Woes Feb. 11, 2021 Key Takeaways – WeakWeak economic economic growth growth prospects prospects and and large large fiscal fiscal deficit deficit will will weigh weigh on on banks’ banks’ performance performance in in 2021. 2021. After After a a sharp sharp recession recession in in which whichGDP shrank GDP shrank by an byestimated an estimated 7.3% 7.3%in 2020, in 2020,we expect we expect GDP to GDP grow to bygrow 3.6% by 3.6%in 2021. in 2021. – TheThe government government focused focused its its attention attention on on the the pandemic pandemic but but is is still still formulating formulating vaccination vaccination plans. plans. Strict Strict lockdowns lockdowns are are unlikel unlikelyy t too return,return ,but but we we do do not not expect expect vaccines vaccines to to be be more more widely widely available available until until the the second second half half of of 2021. 2021. – WeWe forecast forecast that that the the growth growth of of credit credit to to the the private private sector sector will will be be subdued subdued in in 2021. 2021 .Credit Credit leverage leverage (private (private sector sector credit credit t too G GDP)DP) in in the theeconomy economy will will remain remain high high at aboutat about 80% 80% of GDP of GDP after after gradually gradually declining declining through through 2020 2020-2021.-2021. – EarningsEarnings proved proved resilient resilient in in the the face face of of rising rising credit credit losses losses in in 2020 2020--2021.2021 .We We estimate estimate that that credit credit losses losses rose rose to to about about 1.8% 1.8% in in 2020 2020and will and moderate will moderate to 1.4% to 1.4% in 2021; in 2021; nonperforming nonperforming loans loans comprised comprised 6% of 6% total of totalloans loans over thisover period.
    [Show full text]
  • Establishing the Relative Competitiveness Of
    The Journal of Applied Business Research – March/April 2015 Volume 31, Number 2 Establishing The Relative Competitiveness Of South African Banking Shares: A Kalman Filter Approach Chris van Heerden, North West University, South Africa Gary van Vuuren, North West University, South Africa ABSTRACT It is argued that the Basel III Accord will undermine the ROE of South African banks, and with the downgrading of South African banks during August 2014, will force investors to revaluate South African banking shares as attractive investment options. However, results from the Sharpe and Omega ratios, based on returns forecast using the Kalman filter, accentuate the likelihood that the South African industry can still be expected to be a competitive and feasible investment option after the downgrade. Evidence suggests that Capitec Bank Holdings Limited and Standard Bank Group Limited will perform the worst of all the South African banks, whereas FirstRand Limited, Investec Limited, and Barclays African Group will exhibit more promise in the future, outperforming world indices, such as the DAX, FTSE 100 and the S&P 500. Keywords: Kalman Filter; Omega Ratio; Sharpe Ratio; South African Banks 1. INTRODUCTION he 2007-2009 global financial crisis reinforced the importance of revaluating bank competition (GFD, 2013), especially if the competitive edge is associated with financial innovations, like sub-prime lending, which is considered as one of the contributors to the financial crisis (Bianco, 2008; Blundell- TWignall, Atkinson & Lee, 2008). New policies and regulations have been developed to address the sources of the financial crisis (see for example BIS, 2011), though regulators and policymakers should be wary of restricting future bank competition completely in an attempt to stabilise the financial system.
    [Show full text]