2019

Integrated Annual Report

Formulae and definitions

ITEM   DEFINITION  
Asset turnover ratio   Gross principal book revenue expressed as a percentage of average carrying value of purchased book debts.  
Average equity attributable to ordinary equity holders   Sum of equity attributable to ordinary equity holders at the end of each month from September to September divided by 13.  
Average gross loans and advances   Sum of gross loans and advances at the end of each month from September to September divided by 13.  
Average interest-bearing liabilities   Sum of interest-bearing liabilities at the end of each month from September to September divided by 13.  
Average assets   Sum of assets at the end of each month from September to September divided by 13.  
Average cost of borrowing   Interest expense expressed as a percentage of average interest-bearing liabilities.  
Capital adequacy ratio   Total equity plus subordinated debt capital less goodwill expressed as a percentage of total assets less goodwill and cash and cash equivalents.  
Core cost-to-income ratio   Core operating costs expressed as a percentage of total income.  
Core headline earnings   Headline earnings excluding once-off transaction costs.  
Core headline earnings per share   Core headline earnings divided by weighted average number of ordinary shares in issue.  
Core operating costs   Operating costs excluding once-off transaction costs.  
Core profit for the year   Profit for the year excluding once-off transaction costs.  
Core return on average assets   Core profit for the year expressed as a percentage of average assets.  
Core return on average equity   Core profit for the year attributable to ordinary equity holders expressed as a percentage of average equity attributable to ordinary equity holders.  
Core return on sales   Core profit for the year expressed as a percentage of total income.  
Cost-to-income ratio   Total operating costs expressed as a percentage of total income.  
Credit loss ratio   Impairment of loans and advances expressed as a percentage of average gross loans and advances.  
EBITDA   Profit before net interest income, tax, depreciation and amortisation of intangible assets (specifically excluding amortisation of purchased book debts) excluding Transaction Capital Business Solutions.  
Effective tax rate   Income tax expense expressed as a percentage of profit before tax.  
Estimated remaining collections   Estimated undiscounted value of remaining gross cash collections of purchased book debts, estimated to be recovered over the next 120 months.  
Gross loans and advances   Gross loans and advances exclude the value of the written-off book brought back onto the balance sheet.  
Headline earnings   Headline earnings is defined and calculated as per the circular titled Headline Earnings as issued by the South African Institute of Chartered Accountants (SAICA) as amended from time to time, currently being basic earnings attributable to ordinary shareholders adjusted for goodwill impairments, capital profits and losses and other non-headline items.  
Headline earnings per share   Headline earnings divided by weighted average number of ordinary shares in issue.  
Leverage   Total assets divided by total equity expressed in times.  
Net asset value per share   Equity attributable to ordinary equity holders of the parent divided by number of ordinary shares in issue.  
Net interest margin   Net interest income as a percentage of average gross loans and advances.  
Non-performing loan coverage   Impairment provision expressed as a percentage of non-performing loans.  
Non-performing loan ratio   Non-performing loans expressed as a percentage of gross loans and advances.  
Non-performing loans  
a) The balance outstanding of loans and advances where the applicable obligor is:
At least 3.5 monthly instalments in arrears;
In respect of which a qualifying payment/s has not been made during the reference period; and
Where such arrears is due to obligor delinquency.

Qualifying payment: a payment made which is more than 50% of the cumulative instalments due during the reference period.

Reference period: The preceding three-month period ending at the reporting date.

b) The value of repossessed stock on hand that has not yet entered the refurbishment facilities.
 
Pre-provision profit   Profit before tax excluding impairment of loans and advances.  
Provision coverage   Impairment provision expressed as a percentage of gross loans and advances.  
Return on average assets   Profit for the year expressed as a percentage of average assets.  
Return on average equity   Profit for the year attributable to ordinary equity holders expressed as a percentage of average equity attributable to ordinary equity holders.  
Return on sales   Profit for the year expressed as a percentage of total income.  
Risk-adjusted net interest margin   Net interest margin less credit loss ratio.  
Structurally subordinated debt   Senior debt issued by a holding company within the group.  
Subordinated debt   Debt subordinated by agreement with the lender plus structurally subordinated debt.  
Total income   Net interest income plus non-interest revenue.  
Weighted average interest rate at origination   Interest rate at origination weighted on initial capital advanced for the year.  
Weighted average number of ordinary shares in issue   The number of ordinary shares in issue at the beginning of the year increased by shares issued during the year, weighted on a time basis for the period during which they have participated in the income of the group, excluding treasury shares.