Good morning, ladies and gentlemen. It's my pleasure to announce our interim results for August 2023. I think if you look at the year that's gone past, or six months that's gone past, I think the, if you sum up our results, it goes through those three words. It's resilient in the tough times, grow, and then for me, the most important, still investing in the future. If there's any questions, we'll answer the questions afterwards. You can send it through to that email address.
So please send your questions. Hopefully, I'll answer all your questions while I'm presenting. If I'm looking at what is driving Capitec, it's that ability to invest and innovate to meet the clients' demands. If I look at our culture, our culture is all about the client. So every question starts with the client. Is it in the right, best interest of the client? Is we client-centric? And I think it sums up the results. If I look at the resilience of this year, we all know we are in a challenging economic environment.
I'm not gonna elaborate on that, but I think everyone understands inflation, everyone understands interest rates has gone up. For me, it's still interesting. If you look at interest rates, it's gone up with 2.75%. It's actually just exactly at the same level before COVID, so it's not gone up higher than that. But I think food inflation, et cetera, has gone up, and I think the whole world economy was in turmoil. I think what we've shown is that since 2017, we've diversified our income, and we've had very strong transactional performance, and I will elaborate on that.
And then on credit, we are in unsecured lending. So the moment you're in unsecured lending, you need to be agile, you need to be prudent, you need to understand the market, and I think we've done well in that particular area. The second one is on growth. If I'll take out our provisioning figures, then we've grown with 26%, which I think is extremely strong, in this economy. And then, and non-lending income as a percentage of our OpEx. What percentage of our OpEx is covered with that? It's 115%.
So we're starting to cover much more than 100% of our OpEx, and that figure can probably go up to 130%-150%. Then strong capital and liquidity, liquidity. Our capital adequacy is at 37%. That gives us the ability to be conservative, but also to grow going forward. Then, if I look at future focus, there's five areas we are focusing on. And the number one is digital payments or the payments side, because the moment we start seeing people paying electronically, then we understand the client, we understand the business, and we can score the client, and we can assist the client. If you use cash, we've got no indication of what the person is doing with that particular cash.
business banking, insurance, Value-Added Services, probably the surprise that you're gonna see in our results, how we've grown in that particular environment. Then a very strong focus on investing in technology and data. Making certain we're stable, but we are scalable for the future. Our headline earnings growth of 9% to ZAR 4.7 billion. Again, if I look at inflation at 4%-5%, I think the 9% is a very strong performance. If I look at the breakdown of that, I'm not gonna go through every single line item, but you can see our net interest income has grown with 17%, transactional income of 24%, your insurance side with 33%. That gives us income from operations of 21%.
Impairments, given the economy, what has taken place in the last six months, and we'll unpack that in detail, is on 72%, very much in line with what we're seeing in the market. And then your OpEx coming in at 14%, giving us a headline earnings of 9%. So I think that sums up thus. Very strong growth on the top line. We've got impairments. We believe we are at that turning point, and then our OpEx at 14%, investing in the future. I think this is a very important slide, is how we've evolved. We've actually, in 2016, I told the board yesterday, we've decided to become a financial services organization, diversify the company away from lending.
You can see our lending income in August 2017 was ZAR 7.3 billion, or 76% of our income was coming from lending. And then if you look at other income, it was 24%. What you've seen now is our lending income from the retail side is now at 52%, ZAR 9.5 billion, and our other income is plus, minus another ZAR 9.9 billion. So our Value-Added Services, if you add the 600 and the five hundred, you're sitting at 1.1. You can see what insurance has done, and then you can see what business has done. So you can clearly see how the whole income statement is completely diversified and bringing in other income streams, which I believe will grow significant in the future.
If I look at our key ratios, I think non-lending, I've already spoken on OpEx. We're covering our OpEx with 115%, and that can go up probably to 120%-130%. Non-lending income to income from operations, so we exclude the impairment side. We've changed that ratio. It was normally on net income. It's now at 44%. So 44% of our income is coming from other income. Cost-income ratio, 38%. We've always said 40%. We're quite happy with the 38%. We're targeting around about 40%.
It's interesting, I always say that to investors, the only time I look at cost-to-income ratio is actually at half year and full year results, because we believe we take decisions on what is right for the client and what is right for the business. Return on equity, 24%. Our target is normally 25%, and its impairments has dropped up to 24%, and that should go back to the 24, 25% level. Then our expected credit loss ratio is up 1%. In these tough times, 21% to from 20%. If I look at our capital adequacy, a strong growth from 35 to 36, so we're well capitalized. That gives us opportunities to grow, especially on the business banking side, and other opportunities that we are looking at.
And then our dividend per share is up 9%, looking after our shareholders to ZAR 15.30, which I think is also very positive. If I now go and look at Retail Bank and Insurance. So we're moving away from group. We're looking at Retail Bank and Insurance. We're gonna cover these four key themes that's coming through. The first one is our deposits growth and the trust in the brand, because you only will invest your money if you trust the brand. Our take-up of digital products are moving away from cash, and then our credit management, agility that we've shown. If I look at this, it's still frightening. If I look at business bank and Retail, we've got deposits of ZAR 150 billion in the bank, so it's a big number.
If you look at our total deposits, it's grown with 10%, if you combine the two. Interesting, just looking at the BA 900. So BA 900 has also grown with 10%, so we're 100% in line with the market. But given the tough economy, you would think people will spend and won't save anymore. But if you take July to July, last year to this year, the savings has gone up with ZAR 130 billion, a 10% growth, but it's showing you that people are still saving in these tough times. If I look at all these graphs are running in the right direction, so we're growing interest income by 13% to ZAR 7.3 billion.
Just what is the client base looking like? It's the one number that I said when we had 15 million clients, where are we gonna end? And I said, "I don't know." I still don't know where it's gonna end. That's the 21 million clients. What is quite scary is that from August 2019, we've grown with 22 million clients every year. So I think we need to be proud of that, growing with 2 million clients during these periods. The two next ones that I'm really focusing on is our digital client base. 11.7 million clients are now digitally, so they use either app or the internet or USSD. 10 million of that 11 is using the app. And then our fully bank clients, we've changed that definition.
So if there's a regular income of more than ZAR 3,500, you have taken up products off us, and you're showing positive behavior. So you're not using cash, you use digital. That's the definition of that, and you can see that's grown with 12%, and that's grown from 6.7 million to 7.5 million. So for us, it's all about growing that client base. So how do you optimize the 21 million clients? If I look at our Save clients, up to 8.1 million clients, our funeral clients, 2.4 million clients. Interesting, funeral is growing with 400,000 clients year on year from 2019. And our credit clients, 1.3 million.
People always think we lend to everyone, but it's only 1.3 million of the 21 million clients, or 1.3 out of the 7.75 million client that is taking up credit from ourself. The transactional income is up 25% in retail to ZAR 6.5 billion, so very strong growth. And what we've seen is a very strong growth away into the digital space. So if you look at a digital, the app transactions grew by 53%, 789 million transactions that's coming through, and 83% of all digital transactions is now coming from the app. So very strong growth on the app side. I think the VAS products has helped the app transactions quite, quite a lot.
If I look at card, card is up 28% to ZAR 1.1 billion. And a big driver of the card usage is the whole Live Better, Better program that we've introduced about a year ago. And you can see it's changing the behavior of, of the client away from cash and away from branch. If I look at cash, we've added another 600 ATMs. But you can see, if you're looking at per client, the cash volumes are actually coming down. Cash is growing with 3%, but if you, if you divide it by the number of clients, it's actually coming down, and it's exactly what we are looking for because we want to change that behavior into digital and into electronic so that we can understand and help that client.
And you can see branch volumes are actually basically down with 4%. What is interesting in the branch is our self-service terminals has handled now 59% of all transactions, and that is enabling our consultants to really focusing on selling our product range to our client base. Also, exactly what we are looking. We're looking at that 59% to go up to 80%, that we really take all day-to-day small transactions away, and that the consultants can really focusing on selling. The SST looks exactly the same as the app. So it's your first step to move from the app or from SST to the app and to grow it from there. Where's the new products coming in?
We've generated an extra income of ZAR 394 million out of the new products. That's the advanced products, Connect, Capitec Pay. So I think that is a strong performance, and it's gonna be interesting to see where these products are growing. I think what it's showing you is just the power of 21 million clients. If you put the right product in the hands of 21 million clients, you see this uptake, because the majority of these products has been launched in March, and you can see the income stream that's coming through from these products. So that power of our client base and the power of our branch distribution network of 860 branches.
So existing various pro- products, airtime and, and, electricity, prepaid on volume, 6%, and new products on volumes, 124 million. What is it? How is it actually broken up? Capitec Pay. Capitec Pay is where we've actually taking our screen scraping. If you go onto the internet, and you want to pay a merchant, you normally had to enter your credit card details, and then they had to go screen scraping onto the internet and then did the payment. It was a 4-5-step process with a success rate of about 45%. Now, with Capitec Pay, it's a one-step process, and it's 40 seconds to do the transaction, and the success rate is now close to 90%.
We've got 29 partners and about 8,500 merchants that you can buy online from, and you can see the volumes coming through. We're averaging now, the last 2-3 months, 12 million transactions per month. Vouchers as probably the other big successful story, if I look at vouchers, the nice thing about it is the Capitec Flexi Voucher, which is linked to about 25 retailers. So if you buy, you can either buy a voucher for a particular retailer, or you buy the Capitec Flexi Voucher, and from the Flexi Voucher, you've got access to any one of those retailers.
Let's say you pay 100 ZAR, the guy goes to Pick n Pay, he redeems his voucher, but only for 50 ZAR, then he gets a new voucher for 50 ZAR. So we're actually monetizing the whole voucher system. And now we've just launched now, two weeks ago, the Capitec top-up vouchers, so that you can buy data, and you can top up, and you can use either Vodacom, MTN, or Cell C, so you can move. You don't need to stick to one telecoms supplier. You can see what Lotto bill payments on Capitec Connect. Capitec Connect is starting to get to 5 million transactions. If I look at Capitec Connect, eight months, 1.3 million clients. It's again, that power.
You can see where all that sales engine is working. We've worked very hard with Cell C to improve our coverage ratio, with MTN, our quality, and there's been a massive improvement in that particular area. We're seeing a strong growth in our revenue and our active base and our client numbers. As you all know, we've just launched 10 gigs for ZAR 199 in the market last month, or this month, and the uptake has been phenomenal. Just showing how the clients are looking for that product range and just that simplicity. You can see that we've got 2 prices here. Forty-five rand for 1 gig or 10 gigs, ZAR 199.
And it's just coming back to what we do in Capitec well, is client focus and simplicity and transparency. No specials, no frills. What you see is what you get. I think there's, there's a lot of work that we're currently putting into the Capitec Connect space . So it's gonna be interesting to see how this product range is gonna evolve in the next two to three years. Insure, Insure has come a long way. As you all know, we've got our license. Now we've developed our new systems and technology. We've already written 250 policies onto the new system. And that's all Credit Life policies that we've written.
So the whole Guardrisk cell captive for run-off process is in progress, and we should complete that by about May, June next year. So then we will have all the Credit Life policies on our book. And then we're still in negotiations with Sanlam to take over the funeral product range, and that arrangement with Sanlam expires in November 2024. So just to give you a feeling of what's happening, we're quite happy with that, and we're also working on new products that will go into that particular space. So it'll be interesting to see what happens there. Just Credit Life insurance grew 20%, ZAR 900 million, or ZAR 912 million that came out of it.
What we're ensuring is close to ZAR 750 billion. It's quite a scary ZAR 74 billion. ZAR 74 billion that we are actually covering. So it's quite a big amount that we are covering on the Credit Life space. Retrenchment claims, interesting, and it shows you if you ask what's happening in the economy, retrenchment claims are dropping with 8% year-on-year. You would expect in this economy that it actually will increase. We're starting to see the mining companies now saying that they're gonna start retrenching. What we have seen is the very small companies just close their shops, so the person just becomes unemployed. But the medium-sized companies, the bigger companies, we've definitely seen a drop in insurance claims. If I look at funeral plan, it's grown with 59%.
I think what is important, and that's the first, it's gone from ZAR 400 million to ZAR 636 million income on it. It's grown with 59%. In our sense, there's a proper detailed explanation of that. The growth on If you're purely looking at the growth in the policies, that's about a 20% growth. And the other 30%, I'm gonna call it, is accounting and also moving it from investment to the sale in the insurance space, but you can go through that in detail.
I think if you look at it, in the policies that we've written, the middle column, the present value of those policies that we've written going forward in the six months, shows growth of 9%, 11%, and then the net income of that is, 9%. So we're very positive about the funeral, funeral market and the insurance market in total, and I think there's a lot of opportunities for Capitec in that space. Another one that everyone is looking for and wants the answers on, retail credit. I think I'm gonna start with the Reserve Bank stats. When everyone is always talking about, the clients are completely in, over-indebted, and they're in a debt spiral.
But if I look at these stats and are looking at debt to income of all clients in South Africa, it's quite interesting. If you look at March 2019, you were around about 62%-63%. Then you can see that massive spike that happened in COVID, and that was because all income levels actually fallen away. Then you can see now we're back at, you can see at probably at about 62%. So your debt levels, it's gone slightly up March 2023, but we're still very much in line with what we were pre-COVID. I think it just gives a different perspective.
Now, if you look at the cost of credit, the red line, remember what I said is interest rates went up with 2.75%, and interest rates are actually exactly the same as where they were before COVID. If you look at that red line, you can see where it was in March 2019 compared to March 2023. I think a lot of people just got used to that 2.75% lower interest rate and increased their spending. What is definitely hurting the client is the inflation rates, and especially the food inflation rates, and the petrol price, and the exchange rate. That for sure has got an impact on the client, and we've seen it especially in the retail space.
I think this is actually showing the strain that's taking. What we're looking at here, and it's Experian data, is that clients that's never been in defaulted, they never defaulted, and they have defaulted in the last three months. You can see that's gone up from about 1.5-1.6%, suddenly to 2.5%. So you're definitely seeing that strain coming through in the last couple of months, and like I said, I think a big portion of the c-- it's the cost of living that has increased quite a lot. And I think the good thing about it, if we've all seen what inflation and these things are doing, it's coming down. This is an interesting slide.
If you look at number of applications, and that's probably also showing strain in the economy. The blue line is the number of applications, and you can clearly see what it's done. It's gone, and it's... This is NCR data, so it's all the credit providers. It's gone from quarter four, 2020, let's say 11 million applications to 16 million applications, and 15 million in the last quarter. And then you can see what's happening on the take-up rate. Not the take-up rate, the approval rate. The approval rate has gone up from around about 45% to 30%. Now, the big question here is, if you actually use this, you will see the number of clients that are approved is basically the same, but the take-up rate is now the interesting question.
Just to give you a feeling of what we're doing in Capitec, our approval rate is 40%, so we'll approve 40% of clients that comes into the branch, but the take-up rate is only 20%. So what's the difference between approval rate and the take-up rate? We would offer a client, let's say, he wants ZAR 100,000, but we are only offering him 50,000 ZAR, so we'll approve him for 50,000 ZAR, but he wants 100,000 ZAR, so he won't take it up. So the approval rate is 40, our take-up rate is 20%. But you can clearly see people are shopping around, and people are looking for credit. And just looking at a TransUnion report this morning, what they're saying, people are going more to store cards, retail cards, and into the micro lenders.
Short-term loans, the average loan size has dropped, so there is for sure some stress in the economy. What have we done? I think it's important to note that we have made our loan sales and disbursements decrease year-on-year with 9% to ZAR 24 billion. We had brought in very strict criteria of your installment to your income, lowering that particular percentage. We've made 421 different credit changes, and we decreased the access facilities; we've decreased that with about 300%. So we've given you a facility of, say, ZAR 100,000. We see the stress that you're under, and we reduce that facility to about ZAR 80,000.
So those are all changes that was made, and the impact of that is that if you look at the credit facility here, and that's that light blue or middle blue column, we've cut the facility component, we've cut with 62%. So very strong focus on the credit side, making certain that when we grant credit, we grant to the right client. And the max takers, people that's always taking max, we were very strict on those particular areas and made our criteria much more stricter in that areas. Have we turned the corner? That's the 1 million dollar question everyone is asking. And I don't want to look in the future and say I know exactly what's going to happen in the future, but this is, for us, an early stress indicator.
So what we're doing is, if we grant you a loan three months ago, we look at, are you in the stress now? So if you look at that August 2023, that was loans that was granted in June 2023, and then we're saying 7.6% of those clients is, are, either going in arrears or rescheduled, or has gone in, in debt review. There's about 2-3% of those clients, is that they miss their pay date, and they rehabilitate, and they come back. So it's not the whole 7% coming through, but it's just an early stress indicator, and you can see the 7.6% is back on the August 2019 levels. So we believe it's turned the corner. Interestingly enough, this was a June granting.
We've made big changes still in July and August to further reduce our risk, so we expect that 7.6% to lower in the next couple of months. A big focus on collections, 'cause that's the other side. A client is under stress. How do you make certain that you work with the client? We've increased our treatment channels. You know, making certain that you can be treated in, not only with our agent phoning yourself, so there's WhatsApps, there's SMSs, in-app, you can go look at treatments. And then also involving the branches.
Interesting, because they know where the clients are, and it's interesting, the stats that we looked yesterday at the credit committee, is where we use the branches, the success rate is about 61%, compared to all the other channels at 20%. So you can really see a strong focus on the different channels. We brought in a rewarding system, so if you do a full catch-up, you can get up to a ZAR 500 discount, if you repay in that six-month period. So rewarding the client for the right behavior. We've increased our number of call center agents. We've brought in another 40-50 people to help us through this period, and we've increased the number of treatments that we offer our clients.
So you can see, rescheduling, if you compare August 2021, 6.1% now to 6.7%, there will be an increase, because your, your book in Stage 2 and 3 has increased. So you will see more treatments, and then it will normalize over time. Here's our expected credit loss coverage ratio, ECL. You can see of we. And this is retail. What I showed previously was group. It's gone up from 23.5% to 24.5%. So a very big coverage ratio, so we're very happy with our coverage ratio and how prudent we are.
The question everyone has asked again, as we turn the corner, and I think those last two bullets actually shows that in our roll from two to three, Stage 2 to Stage 3, that has dropped 35% from ZAR 2.8 billion to ZAR 1.8 billion. So there's a ZAR 1 billion drop, lesser people going to Stage 3, so there's a big improvement coming through if I look at quarter one versus quarter two. And then our provisioning, how did we provide? You can see there's a drop from ZAR 2.4 billion to ZAR 2.2 billion. So we believe, given our cutbacks in our granting, our collection strategies that we implemented, we will start normalizing in the next six months, which will have a positive impact on our results. business banking.
I think if I look at business banking, we've actually rebuilt everything in the old Mercantile. Somebody asked me this morning, one of the new media people asked me, "Should we call it now Capitec Business?" And I said, "For sure, it's Capitec Business. Mercantile is dead." So we built a completely new online banking platform. So online, where the client can go online and on the internet, have good, full access to his client base. If you go onto the Capitec app now, you can actually choose either personal or retail, and it's a, it's a, swipe left, swipe right. We've opened in August a record 4,500 new clients, but for us, more importantly, is 40% of those clients were opened remotely.
The sole props, and if you are a simplistic company with, let's say, 1 director, we can open you remotely and that whole online opening of account is now on average about 30 minutes. The average in the market is more like three, four, five days. So I think it's remarkable that we can open up an account in 30 minutes. So we still need to get that down. Carl said to me the quickest time that they had was 4 minutes, so that's what we're aiming for. We've basically replatform our systems, moved everything to AWS to give us scalability, and then we've implemented Salesforce and nCino right through the business banking to be able to give us that whole scaling opportunity. So where are we? We've implemented all the systems.
It's the old thing. If you've got four or five systems talking to to each other, there's always a glitch here and there. We're making certain all those glitches are sorted out. We need to handle the volumes over the November December period, and then from next year, that's a big focus as for us to drive business banking going forward. What was the performance of business banking? That grew of 20%, net profit of ZAR 242 million, so very strong growth. Active clients grow over 14%. The loans, loan sales and disbursements up 16%, ZAR 37 billion. Our book has grown to ZAR 16 billion, and our transaction income has grown by 5%.
Now, everyone is asking, "Why is retail growing with 24% and business bank with 4%, with 5%?" And it's purely that we've moved our merchant base from a rental model to a buy model. In the past, we would rent a machine out for ZAR 450 per month. Now, the person buys it outright, for between ZAR 1,000 and ZAR 3,000 and then operate from there on. So it's a much better client-centric model, and that had a big impact on our transactional income. And then, if I look at impairments up with ZAR 165 million, the biggest driver there was rental finance, up ZAR 32 million, and that's the small business, renting a fax mach- not a fax machine.
That's the old time. Printers, et cetera, et cetera. We've seen stress there. We've cut back. We're quite happy where we are there. And then if you grow your book, you will see the upfront provision that we need to bring in was equivalent to ZAR 41 million, and then we see a major change from mortgages to overdrafts coming through in the book. It's actually, for me, the surprise, there was one or two people that fallen over, but I think overall, the business bank book and our businesses are very resilient, and it's actually operating very strongly. And that's actually...
I think the one message in South Africa, people ask me, "What is happening in South Africa?" I think the client is seeing stress, but it's the stress is starting to get lower. But the businesses overall, they've made a plan, and they're coming through these difficult times. So we're very excited about the whole business bank and where that is going. Everyone always asks me about OpEx: Where is OpEx going? Where are we spending our money? So I'm trying to answer that question. If you look at our OpEx, up 14% to ZAR 6.6 billion. So if you just multiply that by two, we're talking here ZAR 13 billion that we're gonna spend on OpEx. 54% of that is salaries.
So there's a big component into salaries that's going through. But you can see, salaries up 11%, salary increases 5-6%. If you look at IT-related, that's 36%, so there's a massive increase on the IT side. And then premises, gone up with, 13%. If you look at that, premises, it's our expansion of our of our branch network, and upgrading of our branch network. Interesting, we've opened about 10 branches, in the last six months, and we're planning to open up another 14 branches... we've got about 80 branches as what we call deep red, so they are under tremendous strain, and we need to create capacity for those, those branches. So we actually stream up.
Where everyone is closing branches, we're still looking at branches and say we believe it's an important part of our future. It's an important part of our sales channels. So you can clearly see how that has increased, and I think the very important thing is all our branches are now on lithium batteries. If we go to stage six, we can operate properly in our branches with our ATMs, and we can clearly see the income streams that we're getting from that. So overall, our expense is at 14%. I think everyone is asking: Where's the IT side going through? And that's a little bit of what I call our investment in the future.
Because if you look at our IT spend, basically for the last four, five years, it's gone up with around about 30%. You can see what's happening on the salary side, you can see what's happening on the other, and then the new one that's coming through is cloud. How are we switching to cloud? If I look at the company, everyone always ask legacy systems. I think that's a big word, and we deliberately, about a year, year and a half ago, said to ourselves, "We need to make certain that we haven't got legacy systems." And we're switching all of our infrastructure. We're switching to cloud, Salesforce, Microsoft, SAP.
So our client interaction, we will own, and we will manage ourselves, but all of the rest, we are outsourcing to the best now in the world, making certain that we are agile and that we can scale going forward in the future. Where are we with cloud? We've now migrated about 75% of our data to cloud. We should be completed 100% by February next year. Our banking app and business bank is completely in the cloud. Payments channels are moving by February 2024. So by about February, October, November next year, we will basically everything that should be in the cloud will be in the cloud.
That will be about 80% of our systems. Salesforce will be implemented then throughout the whole business. business banking are running on Salesforce. BSC is about 40% now on Salesforce. We will complete that whole rollout into the BSC side. So I'm looking forward to the journey, making certain that we can handle the volumes and that we are scalable, and we are flexible to deliver on the client needs. Future focus. What are we doing about the future? Now, we thought long and hard, and Francois came up with actually three rugby balls because it's Rugby World Cup. We'll unpack it from there. I think the most important thing is the 21 million clients.
I've shown you the power of that 21 million clients, but it's how do you optimize that 21 million clients? How do you make certain that we create value to ourselves? How do we grow that client base? The 866 branches, we just see everywhere we how important is that selling and capability of our branches. It's plus, minus about 10,000 consultants that can sell a product, and we can see whenever we put that product in the market, they understand that product, how that product is actually scaling. And what has happened quite a lot with our call centers and our chat centers, now 24% of our calls coming in is now on chat. So you don't talk to a human, you're talking to a chat.
So that whole ability to chat to clients has just improved tremendously. If I look at what we're building around that is our technology and cloud. I explained it previously. And then we're gonna sit now with February, with all our data in the cloud, and that give us a massive amount of agility to better understand our client and offer better value to our client. And the challenge is actually how do we actually become a data company going forward? Then we're sitting with Global One on personal banking and business banking. I think important if I look at Global One full service banking for all. We offer the full product range.
The only one that we not offered is secured vehicles, but every other product that we believe is valuable for a client, we're offering, and vehicles will come over time. We're the leading digital bank. Payments is, for us, extremely important, and you've seen how we've innovated with Garmin Pay, Google Pay, Apple Pay, Samsung Pay. I can't remember when last that I actually had cash in my wallet. I feel sorry when I go to a car guard, and I'm trying to give him a, pay him on the cell phone, or send him a voucher. Starting to change that behavior. And then we've created self-service credit, so you can actually. And I'll go onto the app and actually get your, your credit, and you don't need to interact with anyone.
business banking, a single solution for business banking with a very strong relationship suite that we've built, that you've got basically got a banker, 24 hours available to yourself. Then the other companies that is lying also, or divisions that lying under business bank, rental and finance and payments and forex. I think on top of that is insurance. We've got credit life and funeral, and then there's definitely looking at future products that we'll definitely put onto our license from early next year. Then the areas that we are focusing on, and I think you have seen the results coming through, is Live Better Rewards, Capitec Connect, Partners on VAS, creating that financial ecosystem for the clients to support them.
So I really believe what we're building in the next four, five, six years is helping people to live better through a simplified Personal, Business Banking , insurance, and value-added service. So I'm very optimistic. I'm positive about the future. That's the one thing I've learned. If you're negative, you can't see the opportunities. I think we've got a bunch of people that just see opportunities in this, and we're growing the business. Oh, the one thing I forgot is our fundamentals of simplicity, affordability, accessible, and personal service, just bring back that whole client experience. From my side, thank you very much. We'll open up now to questions. Anton, so I'm gonna leave it to you. If there's any questions that's come through, then Grant and myself will answer the questions.
We've got one question at the moment from, or two questions from Harry Botha of Anchor. The first one is to speak about the credit impairment trends in the Retail Bank by client income and category.
It's the normal situation where you're sitting in your lower incomes are taking the most strain, inflation and petrol has got the major impact on people earning less than ZAR 10,000. That's also where we cut back the most on your lower-end people. And then, if you look at businesses, the area that we've cut back is the small businesses. Because if you're the medium-sized person, you're typically sitting in that bottle shop around the corner.
They're struggling in these particular times. So we've seen very strong strain in that really small businesses with two or three people. But on income levels, it's predominantly on the lower end, and then on the top end. It's the one concern for me in South Africa, is that people are not disciplined enough, and they're not living within their needs. They want to keep up with the Joneses. And I think that's a culture thing that we also need to correct. It's not only a credit thing, it's that whole thing that we all take ownership of our future and that we are tightening, but predominantly in those areas that I've mentioned.
Thanks, Harry. Another question from Harry. Can you provide any color on the opportunities other than the business bank that you're looking at to deploy excess capital?
Well, there is opportunities. We need to pay Sanlam somewhere. There's the whole business banking, and then there's two or three other opportunities that I can't talk about now. But we're not worried about the 36%-37%. For us, it's, it's, it's a positive thing. It gives us, gives us that opportunity to be conservative. It helped us through difficult times. If I just look at COVID, the whole Viceroy Research saga , it just shows us, how conservative is and how resilient we were through these periods. But, yeah, we need to pay Sanlam, and there's big opportunities in, in the business banking, side. If you're looking at a ZAR 16 billion book, it's a half a share, half, y ou know, it's not even one, one percent, so how do you grow that?
We've built the platforms, we've built it to scale, so it's now go and scale it and do it.
We've got another question from Gerald van Rooy. We're seeing strong growth in spending on IT infrastructure and scaling for the future. Please shed some light on the refreshing cycle, constantly replacing or upgrading IT equipment due to wear and tear, obsolescence, and to keep up with technological advancements?
Well, I think that's the whole purpose of the presentation that I've shown, is that we've relooked at all our IT side, and we've basically come up and said, we're replacing everything and made it completely new, taking it to the cloud, using Salesforce, using the latest technology going forward. So this shows you that we don't. Because, you know, it's interesting, everyone asks me about legacy. Legacy is like a new car that you buy.
The moment it goes out, it's legacy. Because a car, within six months, there is new technology coming in. So you need to have a mindset to make certain that you're upgrading and keep abreast. And if you use outside companies like that, international companies, you're upgrading the whole time. Then it's for us to make certain that, on the client service side, we upgrade our front ends and our apps and those things, the whole time. So there's a massive drive to make certain that we don't build legacy and that we can scale.
Maybe just to add to that, I mean, moving to the cloud, you know, removes the need to consistently invest in databases. So, you know, we're moving to AWS, and they have the latest technologies in place, and you're consistently seeing that coming through by doing it.
Then we've got a third question from Peter Cromberge , who asks about when Capitec is next likely to raise funding in the debt capital markets.
We have an issuance planned on the twenty-sixth of November. And yeah, it will, it will be communicated further as we get closer to the date.
Looks like we've got one person that snuck in at the end there. Kurt Baldio has said that, seeing that Capitec services 21 million active clients, which is roughly a third of South Africa, we currently have the least amount of employees of all the Big Five banks, which causes issues. Is there any way that we will be able to deal with this in the future?
I don't understand the question. Is he referring, is he referring that we're servicing 21 million clients with, with 15,000.
Correct, yeah.
Well, that's just making certain that we, our model is efficient, and we can then reduce our transactional fees. If you go and look at everything we're doing, we're 30, 40, 50% lower than the market. And it's just our model that's completely different. So we definitely are saying, "How do we service the market, and how do we create value for the client?" It's not, for us, the number of people you need to employ to increase your base, and how do you use technology to create better value for our client base?
That's all the questions. Thanks very much.
Thank you.