Profits up 72% to R29,6 million Profit margin of 2,7% on loans Number of savings accounts trebled to sixty thousand

CAPITEC BANK HOLDINGS LIMITED

Registration number: 1999/025903/06 JSE share code: CPI ISIN code: ZAE000035861 Registered bank-controlling company

An empowerment deal with Arch Equity

GROUP INCOME STATEMENT GROUP BALANCE SHEET
Unaudited Six months ended August August 2004 2003 R000 R000 Interest on loans advanced Interest on cash and cash equivalents Interest expense Net interest income Net impairment charge on loans and advances Income from lending activities Fees and other income Exceptional income Non-banking gross profit Sales Cost of sales Income from operations Operating expenses Non-banking expenses Exceptional expenses (note 2) Operating profit Tax Net profit attributable to ordinary shareholders (note 3) 244 851 4 404 (6 157) 243 098 (15 970) 227 128 2 964 2 158 52 557 (50 399) 232 250 (184 547) (2 595) (196) 44 912 (15 326) 29 586 184 419 3 597 (2 274) 185 742 (14 593) 171 149 236 320 1 841 44 042 (42 201) 173 546 (145 006) (2 380) (1 024) 25 136 (7 901) 17 235 Audited Year ended February Change 2004 % R000 33 22 171 31 9 33 1 156 17 19 19 34 27 9 (81) 79 94 72 393 177 5 555 (3 518) 395 214 (28 791) 366 423 1 392 357 4 057 92 206 (88 149) 372 229 (300 204) (4 831) (2 350) 64 844 (19 523) 45 321 Assets Current assets Cash and cash equivalents Loans and advances Inventory Other receivables Group loans receivable Current tax assets Non-current assets Loans and advances Group loans receivable Equipment Deferred tax Total assets Liabilities Current liabilities Deposits Trade and other payables (non-interest bearing) Current tax liabilities Provisions (non-interest bearing) Non-current liabilities Deposits Total liabilities Unaudited Six months ended August August 2004 2003 R000 R000 Earnings per share (cents) Basic attributable Basic headline Diluted attributable (note 3) Diluted headline (note 3) Number of shares (000) Issued net of treasury shares Weighted average Diluted weighted average (note 3) Proposed dividend per share (cents) 43,3 43,5 40,6 40,7 68 483 68 376 72 946 26,3 27,2 24,5 25,3 68 837 65 523 70 283 Audited Year ended February Change 2004 % R000 65 60 66 61 (1) 4 4 67,7 70,1 63,1 65,4 68 743 67 028 71 868 20,0 Shareholders equity Share capital and premium Reserves Retained earnings Total shareholders funds Total shareholders funds and liabilities Net asset value per share (cents) Tangible net asset value per share (cents) Share price (cents) Unaudited August August 2004 2003 R000 R000 Audited February 2004 R000

UNAUDITED FINANCIAL RESULTS FOR THE SIX MONTHS ENDED 31 AUGUST 2004 AND PROPOSED SPECIFIC ISSUES OF SHARES FOR CASH
KEY FINANCIAL INDICATORS
Unaudited Six months ended August August 2004 2003 Rm Rm Earnings Headline earnings per share (cents) Dividend per share (cents) Shareholders funds Total assets Market capitalisation Loans advanced Bad debt (%) 29,6 43,5 434 602 507 1 102 1,3 17,2 27,2 402 461 272 915 1,6 Audited Year ended February Change 2004 % Rm 72 60 8 31 86 20 (19) 45,3 70,1 20,0 428 510 398 1 904 1,4

193 184 7 4

118 209 768 733

102 760 132 338 6 891 6 235 2 170 92 665 149 096 60 293 460 540

159 803 134 878 9 141 11 193 62 146 755 48 652 510 484

10 000 167 436 35 073 602 337

OUR VIEW OF THE BUSINESS

The best savings account in the country The number of savings accounts trebled from 18 104 at the end of February to 60 856. This account pays 10% interest to savers, has the lowest cost of any savings account and was recently found in a National Treasury and Reserve Bank study to be the only savings account in the country to give savers a positive return after costs. 192 bank branches A further 44 branches were converted to the full bank platform and we now have 192 bank branches throughout South Africa. By the end of February 2005 we aim to increase the number of bank branches by another 50. The number of ATMs was increased from 75 to 132 and we plan to have 200 ATMs by year-end. Sales growth and arrears Loan volume grew by 20% as a result of the success of our new three-month loan product. Interest income improved significantly. Arrears management continued to improve as a result of good administration and immediate follow-up of outstanding customers. Bad debts (defined as net bad debts as a percentage of payments due) dropped to a new low of 1,3%. This is the best figure in the industry. Remainder of the year The focus for the remaining six months will be on converting existing loan customers to full banking customers. Increase in profits Results to date exceeded expectations. Profits for the full year will not grow at the same rate as during the first half of the year because we charge a reduced interest rate to borrowers who bank with us. Success in converting loan customers to become full banking customers will therefore inhibit our profit growth. We expect our full year headline earnings per share to increase by between 25% and 35% over last year. This forecast has not been reviewed and reported on by our auditors. Consumer Credit Bill A new Consumer Credit Bill has been published. We support the principles of honesty and transparency contained in the bill and are preparing to comment on the detail of the proposed legislation. We are, however, concerned about the proposal that potential price controls in the industry should be perpetuated and the cost of implementation of the proposed rules. Capitec Bank has been the leader in reducing the high cost of short-term loans and we will continue to drive this cost down. Black empowerment The directors propose a specific issue for cash of 1 445 582 shares to Arch Equity at 656,4 cents per share. Arch Equity is a black company that has acquired 13,85% of our equity in the open market. This issue will increase its stake in Capitec to a level exceeding 15%, strengthen the black empowerment credentials of the group and increase compliance with the Financial Services Charter. The proposed issue price is Capitecs weighted average share price over the thirty trading days to 13 August 2004, when agreement in principle was reached. The board has also invited the chief executive officer of Arch Equity, Desmond Lockey, to join the board of Capitec. This appointment is subject to regulatory approval and the proposed share issue is subject to Reserve Bank and shareholder approval. We also propose a specific issue for cash of 200 000 shares at 656,4 cents per share to existing black non-executive directors. This issue is subject to shareholder approval. The company has an empowerment share scheme in terms of which employees are assisted to acquire shares in the company. 124 employees have been helped to acquire a total of 177 000 shares. This scheme continues. Issue for cash to management The directors propose a specific issue for cash of 1 445 582 shares at 761 cents per share to 19 members of management (which includes two executive directors) to enable them to increase their stake in the company. We value the commitment and wish to retain the management expertise of employees who have invested in Capitec and who are eager to increase their investment. The proposed issue price is Capitecs weighted average share price over the thirty trading days to 20 September 2004, when this transaction was formally approved. This proposal will also be presented to shareholders for approval. A circular containing details of the proposed specific issues of shares will be sent to shareholders on 7 October 2004 and a general meeting will be held on 22 October 2004 to approve the proposed specific issues of shares. The transactions will become effective when shareholder and regulatory approvals are obtained.

33 164 37 740 29 850 96 354 168 137 314 003 728 119 469 434 200 602 337 634 583 740

24 902 28 927 1 143 2 657 57 629 326 905 478 75 528 402 911 460 540 585 498 395

11 897 31 709 1 746 36 979 82 331 323 792 745 103 616 428 153 510 484 623 552 580

EARNINGS PER SHARE

NOTES
1. ACCOUNTING POLICIES The interim consolidated financial statements are prepared in accordance with AC 127 Interim Financial Reporting. The accounting policies applied in the preparation of these interim consolidated financial statements conform to South African Statements of Generally Accepted Accounting Practice and are consistent with the accounting policies applied in the previous year, with the exception of the implementation of IFRS 2 Share based payments. The August 2003 results were restated as follows: The leave pay provision has been reclassified from provisions to other liabilities on the balance sheet. The general doubtful debt provision of R1,0 million (R0,7 million after tax) was reclassified to statutory provisioning reserve account, as AC 133 does not allow for any general debtors provisions. 2. EXCEPTIONAL ITEMS Exceptional items relate to the scrapping and disposal of fixed assets. 3. SHARE OPTIONS The diluted earnings per share and diluted number of shares are calculated as if all outstanding options were exercised at the average market price for the period. The movement in the number of share options for the period was as follows: Strike price (cents) 142 000 6 351 (1 692) (7) 4 652 159 000 756 (172) (9) 575 240 000 753 753 573 000 1 760 1 760 Total 000 7 860 1 760 (1 864) (16) 7 740

RECONCILIATION OF ATTRIBUTABLE EARNINGS TO HEADLINE EARNINGS

Unaudited Audited Six months ended Year ended August August February 2004 2003 2004 R000 R000 R000 Net profit attributable to ordinary shareholders Exceptional items after tax: Profit on disposal of foreign subsidiaries Impairment of goodwill on acquisition Loss on disposal of fixed assets (note 2) Headline earnings (note 3) 29 586 137 29 723 17 235 (320) 600 297 17 812 45 321 (357) 1 206 801 46 971

GROUP STATEMENT OF CHANGES IN EQUITY

Unaudited Audited Six months ended Year ended August August February 2004 2003 2004 R000 R000 R000 Ordinary shareholders funds at beginning of period Change in accounting policy Restated balance at beginning of period Hedges fair value (losses)/gains net of tax Net profit for the period (Share purchases)/Value of employee option services (note 3) Dividends paid Ordinary shareholders funds at end of period 428 153 428 153 (17) 29 586 (9 789) (13 733) 434 200 385 933 345 386 278 (222) 17 235 27 (407) 402 911 385 933 345 386 278 45 45 321 (3 084) (407) 428 153

Number of shares Opening balance Options issued * Options exercised Options lapsed Closing balance

* Issued to executive directors 500 000 The shares acquired relate to the settlement of options for the share incentive scheme, as well as treasury shares held by the trust. The implementation of IFRS 2 Share based payments reduced the earnings and headline earnings for the period by R300 000 (R27 000 to August 2003 and R61 000 for the year ended February 2004). 4. PROPOSED SPECIFIC ISSUES OF SHARES The table below sets out the unaudited pro forma financial effects of the specific issues. The unaudited pro forma financial effects have been prepared for illustrative purposes only and because of their nature may not give a fair reflection of the financial position nor the effect on future earnings after the specific issues. Before (Cents) After (Cents) 637,1 588,1 42,1 42,3 39,6 39,8 71 574 71 467 76 037 Change % 0,5 0,9 (2,8) (2,8) (2,5) (2,2)

On behalf of the board Jannie Mouton Chairman Stellenbosch Riaan Stassen Chief executive officer 22 September 2004

SEGMENTAL RESULTS
Banking R000 Unaudited Six months ended August 2004 Revenues Headline earnings Assets Unaudited Six months ended August 2003 Revenues Headline earnings Assets Audited Year ended February 2004 Revenues Headline earnings Assets Wholesale distribution R000 Total R000
Net asset value per share Net tangible asset value per share Earnings per share Basic attributable Basic headline Diluted attributable Diluted headline Number of shares (000) In issue net of treasury shares Weighted average Diluted weighted average

634,0 582,8 43,3 43,5 40,6 40,7 68 483 68 376 72 946

GROUP CASH FLOW STATEMENT

Unaudited Six months ended August August 2004 2003 R000 R000 Cash flow from operating activities Cash flow from operations Increase in loans and advances Increase in other liabilities, provisions, loans and deposits Tax paid Dividends paid Cash flow from investment activities Net investment in equipment Disposal of subsidiaries (Increase)/decrease in other investing activities Cash flow from financing activities Shares acquired (note 3) Increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 84 695 74 906 (61 495) 86 673 (1 656) (13 733) (41 591) (41 591) (9 789) 33 315 159 803 193 118 26 017 28 202 (7 471) 6 316 (623) (407) (27 333) (27 324) 320 (329) (1 316) 104 076 102 760 Audited Year ended February 2004 R000 100 403 85 725 (15 440) 31 148 (623) (407) (41 529) (44 141) 357 2 255 (3 147) 55 727 104 076 159 803

252 219 30 760 591 397

52 557 (1 037) 10 940

304 776 29 723 602 337

188 252 18 351 452 615

44 042 (539) 7 925

232 294 17 812 460 540

400 124 48 471 499 786

92 206 (1 500) 10 698

492 330 46 971 510 484

Earnings per share is based on the following assumptions: The specific issues were effected on 1 March 2004. A dividend of 20 cents per share was paid on the 3 091 164 shares issued. STC at a rate of 12,5% was taken into account on the dividends paid. Interest was earned on the net cash at the Groups marginal return on excess funding (7,69%). A tax rate of 30% was applied. Net asset value per share and the net tangible asset value per share are based on the following assumptions: The specific issues were effected on 31 August 2004. Proceeds of R21 802 479 were received in cash.

COMMITMENTS
Unaudited August August 2004 2003 R000 R000 Guarantees Issued to non-banking institutions Capital commitments approved by the board Contracted for Not contracted for Operating lease commitments < 1 year 1 to 5 years > 5 years 101 5 785 56 123 36 434 59 033 1 651 1 815 7 491 16 550 27 351 31 189 Audited February 2004 R000 1 949 16 446 39 991 34 874 50 704

Company secretary and registered office Christian George van Schalkwyk BComm, LLB, CA(SA) 10 Quantum Street, Techno Park, Stellenbosch 7600 (PO Box 12451, Die Boord, Stellenbosch 7613)

Transfer secretaries Computershare Investor Services 2004 (Pty) Limited Registration number: 2004/003647/07 7th Floor, 70 Marshall Street, Johannesburg 2001 (PO Box 61051, Marshalltown 2107)

Directors JF Mouton (Chairman), R Stassen (CEO)*, CJ Borstlap*, AP du Plessis*, MS du P le Roux, Prof MC Mehl, Ms NS Mjoli-Mncube, CA Otto, JG Solms, Dr J van Zyl Smit *Executive Sponsor PSG Capital Limited (Registration number: 2002/017362/06)

www.capitecbank.co.za
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