Good afternoon, ladies and gentlemen, and welcome to the 2nd virtual Annual General Meeting of Shareholders of Capitec Bank Holdings Limited. My name is Santi Boetha, and I chair the Board of Capitec. With the COVID-nineteen pandemic still in force, We decided that in the interest of everybody's well-being and safety to again convene a virtual meeting for this year. As a quorum of members is present, we have at least 3 shareholders present and at least 25% of both have been submitted on proxy and notice of this meeting has been given in an appropriate manner. I declare this meeting properly constituted.
The notice convening this meeting was distributed on 28 April 2021, allowing sufficient time for members to peruse the contents thereof. I propose, therefore, that the notice be taken as read. This being a virtual meeting, we need to vote on a poll on all the resolutions proposed in the notice. We will open the voting on all the resolutions now to enable you to vote at your leisure whilst I read through the resolutions. Select for if you agree, select against if you do not agree or select abstain if you do not wish to vote on a resolution.
You will still be able to send messages and view the webcast whilst the poll is still open. I will allow for questions on all the resolutions after all the resolutions have been read. Once all your questions have been dealt with, we will ask you to finalize your votes, close the poll, and we will then display the results of all the resolutions on the screen. If you wish to ask a question, select the messaging icon, Type your message in the chat box at the bottom of the messaging screen and then press send. Harry Faurin, The group's CEO of Capitec will present an overview of Capitec's performance at the end of this AGM.
The company's act requires a member of the Social and Ethics Committee to report on the affairs of this committee. This report is included in the integrated annual report. Emma Marshall Wahene, Chairman of this committee, can address any questions that you may have at the end of this meeting. We will offer a further opportunity for general questions after Harry's presentation at the end of the meeting. Order resolutions.
So we will now move to the business of the day. So order resolution number 1, the reelection of Dany Menges as an independent nonexec Director of the company. Donnie was the CEO of the MediClinic Group until his retirement in 2018 and currently serves on the Board of MediClinic International. He joined the Board of Capitec in 2018 and is a valued member of the Board. Danny is present.
So Danny, please show yourself on screen.
Okay. Good afternoon, everybody. My name is Danny Meinkees, And I'm available for reelection to serve on the Capitec Board. So thank you. Thanks, Chair.
Thank you, Danny. So please vote now if you have no questions regarding this resolution. Order Resolution 2, the reelection of Pete Merton as a Non Executive Director of the company. Pete is the CEO of PSG Group and serves on the boards of a number of companies. Pete joined the board of Capitec in 2007 and is an experienced and valued member of our Board.
Pete is present. Pete, please show yourself on screen.
Good afternoon, ladies and gentlemen and shareholders. I hereby put myself up for reelection. Thank you very much.
Thank you, Pete. So please vote now if you have no questions regarding this resolution. Order Resolution 3, The reelection of Jean Pierre Festacres as an independent nonexec director of the company. Jean Pierre is a chartered accountant and the Chairman of our Audit Committee. He is well positioned to serve the business with his Analyst and audit experience, Jean Pierre joined the Capitec Board in 2015 and is a valued member of the Board.
We are on ordinary resolution number 3, Jean Pierre Festard. So Jean Pierre is present. So Jean Pierre, please present yourself on screen.
Thanks, Santi. Good afternoon, everyone. My name is Jean Pierre, and I'm available
Thank you, Jean Pierre. So please vote now if you have no questions on this resolution. Order Resolution 4, confirmation of the appointment of Cora Fernandez as an independent nonexec Director. Cora is a chartered accountant and has extensive experience in investment management and private equity. Cora joined the Capitec Board on the 25th September 2020, Cora is present.
So Cora, please share yourself on screen. Good afternoon, ladies and gentlemen. My name is Cora Fernandez, and I'm available to sit on the Capitec Board. Thank you, Che. Thank you, Cora.
So please vote now if you have no questions on this resolution. Order Resolution 5, The confirmation of the appointment of Stan DuPlessis as an independent nonexecutive director. Stan is Chief Operating Officer and Professor of Economics at Stellenbosch University. He is a specialist in macroeconomics and Monetary Policy and has been an advisor to the South African Reserve Bank and National Treasury on macroeconomic policy. Stan joined the Capitec Board on the 21st September 2020.
Stan is present. So Stan, please show yourself on screen.
Good afternoon, Chair. Ladies and gentlemen, my name is Stan DuPlessis, and I'm available to serve on the Capitec Board.
Thank you, Stan. So please vote now if you have no questions on this resolution. Honor Resolution 6, the confirmation of the appointment of Boussy Maslangu as an independent nonexecutive director. Woosi is the Co Founder and Director of Tamela, an Investment and Corporate Finance Business. He has extensive experience in finance and Investment Banking.
Bussi joined the Capitec Board on the 25th September 2020. Bussi?
Good afternoon, ladies and gentlemen. My name is Bussi I'm Nasalu, and I'm available to stay on the Board of Capitec.
Thank you, Busi. So please vote now if you have no questions Regarding this resolution, order resolution number 7, the reappointment of PWC as auditors of the company Up to the next AGM in 2022, please vote now if you have no questions regarding this resolution. Order Resolution 8, the reappointment of Deloitte and Touche as joint auditor until the next AGM In 2022, please vote now if you have no questions regarding this resolution. Ordinary Resolution 9, the authority to 1, issue loss absorbent capital securities and 2 ordinary shares upon the occurrence of a trigger event in respect of the lost absorbent capital securities. So Please vote now if you have no further questions on this resolution.
Honor Resolution 10, the general authority to issue ordinary shares for cash. Please vote now if you have no questions. Order resolutions 11 and 12. This is the nonbinding endorsement of the remuneration policy and its implementation. The purpose of Order Resolutions 11 and 12 is to test the view of shareholders of our remuneration policy and our implementation of the policy.
So just as a brief recap, In March 2020, South Africa went into one of the hardest lockdowns outside of Southeast Asia. As the lockdown was extended, Financial hardship to a large portion of our client base and huge internal operational challenges became a reality. Our leadership team and all employees work tirelessly to safeguard and balance shareholder interests with the health and well-being of our clients and of our staff. While the group financial performance was negatively impacted in the first half of the year, Strong and decisive leadership and innovative and agile delivery from all our staff ensured that we exceeded market expectations in the second half financial performance. The Remco, within its mandate, had to apply their minds to ensure that pay was aligned to performance and that staff remained motivated.
As such, the Remco aligned both short term and long term incentive to reward all staff in the group. The overall remuneration philosophy of Capitec remains unchanged and fit for purpose for the achievement of long term on strategic targets. So we'll now move to ordinary Resolution No. 11, which is the nonbinding endorsement of the remuneration policy. So please vote now if you have no questions pertaining to this resolution.
Order Resolution 12 is the nonbinding endorsement of the implementation Report of our remuneration policy. So once again, please vote if you have no further questions on this resolution. On Resolution 13, authority to amend the definition of employee in the Capitec Bank Holdings shared trust deed. The purpose of the amendment is to be able to use the share incentive scheme governed under the trust as a tool to recruit senior managers to key roles in the group. So please vote now if you have no further questions on this resolution.
So that concludes The ordinary resolutions of the day. We now move to special resolutions. So special resolution number 1 It's the approval of the nonexecutive director's fees for the financial year that ends on 28 February 2022. So please vote now if you have no questions on the special resolution. Special Resolution 2, the general authority to the company and any of its subsidiaries to repurchase up to 5% of the ordinary shares issued by the company.
So please vote now if you have no further questions. Special Resolution 3, the authority to the Board to authorize the company to provide any financial assistance to any related or interrelated company. So please vote now If you have no questions pertaining to this particular resolution. And then Special Resolution 4, the Authority to the Board to authorize the company to provide financial assistance for the acquisition of ordinary shares in effect of a restricted share plan for senior managers. So once again, please vote If you have no questions pertaining to special resolution, number 4.
So we've now concluded on all the resolutions for this particular AGM. If you have any specific questions on any of the resolutions, You can ask
them now.
Okay. So there's a question from Andrew By the way. I note the reports concerning COVID and the impact of the pandemic on clients. I would appreciate a comment on how the impact on employees has actually played out and how Capitec employment policies and procedures have been and will continue to be changed. So Doctor.
By the way, Dani, can I ask you, Dani Maintes, who's Chair of the Ramco, to take this question?
Thanks, Chair. I will start, and I think then Gerri can add to it from a remuneration point of view. I think as you summarized, Chair, we had to Reevaluate during the year because the pandemic really caused havoc. There was uncertainty. We stopped all short term bonuses, the calculations of that.
We stopped increases. And as you've noted in the REM report, we didn't give increases this year for the senior execs. But as the year panned out and as we did a new budget that we approved at a board level, we've set new targets. And I'm pleased to say that A normal increase was given to all staff. It varied.
At the lower end of the spectrum, it was a higher increase. The higher end of the employee group, it was lower, plusminus inflation related. And I'm very proud and very pleased to report that none of the employees was Terminated, there were no layoffs, no salary freezes. So the bank managed to maintain the business and look after the staff and the clients. I think that is a short summary.
I don't know whether Harry would like to add anything.
Thank you, Donnie. Harry, anything you wish to add?
No, I think the only thing to add is the fact that we had to adapt very quickly to work from home. And And as the year progressed, we started to move people back. And I think the biggest challenge now is to get that balance right between work from home and work from office. So I think that's a big opportunity. And then the other big thing is we've driven very hardly multi skilling and people using people in different jobs because This has given us a lot of opportunities in that regard.
Thank you. Any more questions? No further questions? Okay. So if there are no further questions, we will close the poll and display the results of the votes on the screen.
Are we ready for the results to be displayed on the screen?
Results will come up shortly, Chen.
Thank you. So just a minute or so. There you are. So I'm just reviewing all the results. So in terms of Honor Resolution number 1, 4, 96.31 percent, passed.
Order Resolution 2, 93.35 percent, Passed, Order Resolution 3, 98.35 percent, which is passed. Order Resolution 4, 99 point 4, 6, passed 5, 99.28% past 6, 99.26 Passed, 7, 79.82, which is past 8, 98.39, passed, 9, 97.93, which is passed 10, 97.12, which is past 1179.16, which is past 12, 48.75, which is not passed 13, which is 99.44, passed And then special resolution 199.41 passed, 299.26 Fast, 3, 99.56, Fast and 4, 99.43, which is Fast. So Thank you very much. So all the resolutions have been passed with the requisite majority vote, Except for Honor Resolution No. 12, which is the nonbinding endorsement of the implementation of the remuneration policy, As we have not received the requisite 75% on the nonbinding endorsement of the implementation of the remuneration policy, We will further engage with interested shareholders.
We have already engaged with some shareholders prior to this AGM. We will communicate a proposed date for such engagements on SENS this coming Monday as part of the AGM results announcement. So ladies and gentlemen, as all the agenda items have now been dealt with, I would like to take this opportunity to thank you for attending this AGM today and also for your interest in Capitec. I now declare The AGM closed. Should you have any questions regarding the affairs of the Social and Ethics Committee, Emma Marshall Wine He's present to answer those.
And if there's no questions to Emma, then I'm going to hand over to Harry Faury, our CEO, Fer, who will present an overview of Capitec. So Harry, over to you. Thank you.
Thank you, Sanjay. Good afternoon, everyone. Yes, I think we normally during my presentations as we make a video of Either the future or the year that's passed, but we thought it's better that given that Capitec is 20 years old that we actually reflect on the 20 years and what has been achieved in the 20 years. It's interesting, we normally get that question when we started off the bank Did we think we're going to be this big? I always said no.
The answer lies and we've always ticked off on the mentors And focus on the implementation of our strategies and that's still what we're doing today. What was also for me very encouraging and quite an experience is when We had our celebrations here in March. There was still 49 people that actually joined me and Andre, We've been with the bank for 20 years. So I would like to share that video with yourself.
With Rian Sarsen As MD and Michiel Leroux as CEO, Capitec officially opened for business on the 1st March at 8 a. M. Shub, 1 hour earlier than the banks next In 2001, we had 55 branches, less than 500 employees and only 25,000 clients. Global 1, the first all in one solution making banking more simplified for thousands of clients. A mobile bank facility was built in the back of the car, Useful workplace visits.
The organic evolution of Bankimataz, a briefcase with killer front end equipment, which eventually led to Tobi, Mobile Banking on a tablet. At the end of 2,006, we had 280 branches, 2,000 A refreshed logo At the end of 2011, we had 507 branches, 7,100 employees, 3,700,000 clients and our shares traded at R185. Headline earnings per share up by 49%. Capitec clients could now do online shopping where the card is not present at the point of transaction. Harry Furi was appointed CEO when Leon Staffing retired.
At the end of 2016, we had 796 branches, more than 13,000 employees, 8,600,000 clients and 5,800,000 digital banking clients. Our shares traded at ZAR125 headline earnings per share up 18%. We refined our credit offer to provide clients With unsecured credit solutions at competitive interest rates similar to the secured market, our online credit estimate tool was also created to help our clients get a Leaders Awards, we received the prestigious Company of the Year Award. Our resilience and commitment to transparency was key in our ability to refute the allegations and restore the trust of our clients And stakeholders. Global 1 expanded with the exciting addition of Insure, And Innovative's new funeral plan bringing great value to our clients.
With Mr. Leroux stepping down, Santi By March 2020, our new head office was completed and some of our teams started moving in. But then, Don't masks and face shields, disinfectant in hand as we offered clients personalized service in a time when smiles We're hidden behind masks. Our campus based employees were required to work remotely Despite connectivity issues and occasional bouts of load shedding, the challenging times brought a renewed energy and focus to improve our product offering. Here's a brief look at some of the innovations that saw the light in 2020.
Our new app became the remote control of your financial life with a number of new Enhancements, Gan2Pay, a virtual card, easy equities available as a widget on our app. Open an Financial year end, we had 857 branches, 14,672 employees, 15,800,000 clients and 8,600,000 digital clients. In 20 short years, we have disrupted the banking industry and grown into the So successful to date. Becoming the best bank in the world is not a destination. It is a daily journey of small steps to empower people
Okay. I think of the year that's gone past, I think these two words sum it up. That's a year that we had to be agile and it's a year that we focus tremendously on digital. I just want to remind everyone that this presentation that I did about a month and a half ago for our year end results and that's got much more detail about the financials. I'm just going to cover certain aspects of the financials that I'm going to focus on.
If I look at the year that's gone, it basically consists of 2 halves. I think we all knew that March, the whole COVID started. And then we had to quickly look at how do we make certain that our Staff are safe, our clients are safe, now that we start working from home. And then I think the biggest challenge was to understand the full potential COVID on the business, on our credit, on our provisioning. We also spent that through the 1st 4, 5 months to re budget and basically stop all new positions, Stop salary increases, Donnie referred to it.
And then second half was to actually really start to focus on growth. And I think what we've done, I think it's a very good achievement. We've launched 6 new products in that period. And I think what is important is right through COVID and for the full year, we've I'll turn our service delivery right through. If I look at our financial results, I think what is important is that You can see the impact of the first half and then the positive results in the second half.
I I think what is important is, I remember when I said to our team here in August, September, if we actually can achieve the Same figures as what we brought in 2020, then we will have a very good year and that was SEK 3,300,000,000. And as you all know, we've actually increased that with 18% And then also with ROE of 30%. So I think overall, we had a tremendous very good year. We recovered well and I'll impact that a little bit further. If I look at our key drivers, we've always said that we want to cover our operating expenses with That was the objective we said to ourselves about 10 years ago.
And I think what is quite nice is you can see in August February, We've actually achieved that with 101% and 102%. And even if you bring Mercutide in, you can see we're basically close to that. And then on the second side, You can see the combination between our returning of our credit income and our transactional income. We were as high in the 1st 6 months of 87%, 86% and then probably 61%. Our aim was actually to get to plusminus50 So 30% of our income coming from credit and 50% of our income coming from transactional income.
So I think what it shows us is how well diversified we are. We could go through a And that we're not that dependent on the credit side. I think the challenge is given the economy and given COVID, How do we open up on the credit side and how do we manage the credit side? So I think that's a challenge for this year. Cost to income, I think we're quite happy with plusminus40%.
And in capital adequacy, I think what helped us quite a lot in this period is we've always been very conservative. We've always said we need to make certain that we can go through Experience is like a COVID, I think we've shown that. And you can see how the capital adequacy has improved to about 36% And the impact of buying Mercantile, you can see that impact coming through during 2019 2020. If I look at Our retail credit sales, I think what is quite important is our sales drop In the second half, due to COVID, we pulled back. And in the second half, we actually opened up.
If you compare ourselves, it was €29,000,000 versus €39,000,000 in the previous year. But if I look at the year ahead, I think we're on track to get back to about a €39,000,000 sales. It all depends on what Y3 is going to do and what happens with the vaccines. We're quite positive about our credit sales in the sense of what we've achieved. I think the access to this facility has done Exceptionally well.
About 50% of our sales now coming through from either KKR or from the access facility. What is interesting is on the access facility, about 50% of our sales in the access facility are sold to People that has previously got credit from us and the other 50% is to clients that never took credit with ourselves and now for the 1st pharma stacking up credit As well as the new clients. So we're very happy with this product. If I look at The impact of COVID, I'm just going to try and move the screen here because it's in my If I look at the impact of COVID, you can clearly see what has done to our provisions. I think what you look at it is, if you look at you see And then the SEK7.8 billion in 2021.
I think what is important to note here is the dark blue because we provide In 2020, we provided DKK 250,000,000 and you can see in the first half the DKK 4,300,000,000 Then you can see we started releasing as we started to understand what is happening with COVID. So as we're standing now, we've got SEK 3,200,000,000 That has been provided for COVID. And I think the next couple of months will tell us what's going to happen in that particular space. This has been a very important slide. It just shows what has happened with digital.
You can See our digital transactions have gone up from €560,000,000 in 2019 to over €1,000,000,000 in 2020. And we haven't increased our prices on the door for the last 3 years. It's a very simple sum. That's ZAR1 per transaction And you can see the very strong growth. You could also see in the 6 months prior, there was no dip.
If you look at the point of sale transactions, you can clearly see the dip in the 1st 6 months, the EUR 4.19 versus the EUR 5.84. But again, we have over €1,000,000,000 transactions on our card transactions. And then cash basically staying pretty much Flat. And for us, that is very promising. We would like to keep get our clients moving them away from cash to electronic payments.
But I think, yes, this is a very positive slide for ourselves. If I look at our transactional income and how has it grown over the last couple of years, You can see the impact is growing steadily. And then last year, we managed to increase it with about SEK 1,000,000,000. That's driven by €160,000,000 and then about €100,000,000 due to Mercantile. But I think overall, we've done exceptionally well.
And you can see The impact of our funeral plan, we've launched it in May 2019 and the contribution to our income was yen £4,000,000 and £4.30 million and now £650,000,000 So I think we've done exceptionally well on our transactional and our funeral income. I want to now spend time on the bank for all South Africans. There's a perception in the market where People think that we're actually focusing on a certain segment of the market. When we wrote our business plan in 2000, we always said we want to bank 96%, 97% of all South Africans. So that was the aim.
And I think we're starting to get to that aim. So I would like to unpack that to show the inroads that we've made. I think if we look at our number of clients, the number of clients, you can see how it's grown basically for the last 2 years, 3 years, we've grown with SEK 2,000,000. That gives us a good €2,000,000 per year. That gives us a very strong base.
We're now over €16,000,000 client. The two numbers that we're driving very hard is the digital number, 8,600,000 clients that's on digital, that figure is now over 9,000,000. And then the quality clients, the quality banking clients, which is just over 4,000,000 And then the credit lines, I think the credit lines stayed flat actually over the last couple of years at €1,000,000 And that's, I think, a reflection of how we've actually moved out of the lower income segments where the big volumes were. And secondly, our advertising given the economy and given COVID where we pulled back. So we're quite happy with that SEK1.1 million that is actually I think on the right, a very interesting stat is that the online retail transactions in 2020 A group of 66% for South Africa in totality to DKK30 1,000,000,000, that's 4.2% of total retail value in South Africa.
Now just to give you an indication, America and China was in 2019, I don't know what their latest figures. America was at 15%, China was at 30%, was done online. So there's still a lot of ways in South Africa to grow in that But that's why the digital space is why it's so important. There's about 10,000,000 people that is doing transactions on a digital or online platform. And you can see what clothing and groceries for COVID has actually done.
So I think this trend is there to stay and I think that's going to grow quite a lot. This is me a positive slide. It shows clearly that we are the market leader when it comes to digital. You can see that we've downloaded from 2019, we're the leader. 7,000,000 people has downloaded the app and you can see the other banks where they are.
And the slide on the right, the cell phone is actually one that we watch quite a lot. This is Apple's stats and that was a set of yesterday. As Shailesh, if we compete with WhatsApp and TikTok, you can see we number 3, meaning we're the app that is the 3rd most downloaded. This vary. We vary between 1st place, 2nd place and 3rd place the whole time.
So you can see there's a big adoption on the app for ourselves, which is Very encouraging. This is actually the interesting slide for me. What we've just done is we've unpacked the 15,700,000 clients And unpack it into age groups to see who is my thesis of Capitec. And you can see on the left people that's younger than 20, there's 22,000,000 people in South Africa, a big portion of our population is below the age of 20. We've only got 1,000,000 clients that is in that segment.
Then if we look at 21,000,000 to 40,000,000, there's 20,000,000 people in South Africa. We've got a 9,000,000 clients. So we've got about a market share of about 44%. So you can see we're very strong in the 21 to 48 groups. We're focusing our marketing and our strategies on 20 to 35.
And then one I think which is interesting is if you look at our 41,000,000 to 60, 11,000,000 or 12,000,000 people in South Africa is in that age group And we've got a market share of 38 percent or 4,500,000 people is actually, has got an account with ourselves, our active account. And then the people over the age of 60, there you can see we've got a 20% market share. I think the challenge here is now to track this 15.7 1,000,000 clients. There's a lot of clients where we're not 1st in wallet. So we're not the 1st card that we actually take out.
And we're second in wallet. You can argue that the people that bank with ourselves that SEK 4,000,000 that quality clients, they will take out our card first. And it's actually how do we actually change it and how do we make certain that we actually can get These people today are to use our card first. I think if you look at our full bank offer and I just want to unpack that to you. So If I look at TransX, that's our main account.
You can see what is interesting is we've done 5,300,000,000 transactions And last year on it, up 17%. We've got a market share on real time payments RTC of 37%. Now you can see quite a lot of new solutions that's been launched. I think the one that excites us is that you can now open your account on that. You don't need to go to a branch.
So if you want to lie on your couch and you want to open up a Capitec account, you pass through, We do a selfie, we go to the Department of Home Affairs and you can open your account and then we will deliver your debit card to yourself. From July, we will deliver your credit card if you qualify for credit card. So there's quite a lot of things that's happening on that space. Then on the save As I said, we offer you full savings plan, which always for me quite nicely talk to clients is that they say, What they like about it, they can name it. So you can name it on saving for something, let's say, a car or a holiday.
You now call it the holiday And then you put your money in there and that is as I said, meant to go away and you can use it. You can see we're still offering very strong interest. The lowest interest is 2.25 percent and we paid out DKK4.4 billion this year On interest to clients. If I look at insurance, We offer Creditor Life, which covers you from replenishment as well as for death. We basically were covered for debt for a big portion of last year, but with replenishment we were self insured.
From the 1st May we are self insured in both of those We've seen a big increase in replenishment claims as well as debt claims, but we've seen in the last 2, 3 months, we've seen a big drop in that. And then on the funeral plan, I think that's where we've done exceptionally well. And maybe the best stats on the ground is that 37% of all new funeral policies sold It's a Capitec policy. And if you go and look at rand for rand, we offer the best coverage ratio for the lowest premium. And then on the credit side, that's where we've actually worked quite a lot.
We're offering credit up to 500,000 for combined products. So if you Choose between your IF, your credit card or your term loan, you can go up to 500,000. And we've launched access facility. You all know about Capitec Ambiance. And now in April, we launched purpose.
We've spoken about purpose, but you can see we've launched purpose now with CTM, with Stadia, with MediClinic and with YCAS. So that's a big focus for us. And how that actually works is the client applies for credit, compliant in store. We pay the 3rd party, So the money doesn't go to the client, it goes to the 3rd party. And by doing that, we can actually pass The loan had a much lower right.
So for us, that's a very promising Incentive abuse. I get quite a lot question on what is our business model. And we always ask the question is, how do you feel about just being digital or what it branches? We see these three circles as a critical part of our offer, because we believe you need to have a branch. The branch is a platform where we So from where we engage with the client, where the client can sit in front of us, we see it with funeral.
85% of our funeral policies are So Ingvar was replied, he's very serious about his funeral policy and he really wants to make certain he takes up the right cover. Then you've got your digital side, we use self help and where the client can increase transactions and operate. And as you know, there's 8,700,000 clients on. And the one that we're really focusing on now is client engagement because as the client is getting less and less into the branch, we need to engage with that client and make certain that he actually Makes the right decision and is informed of new products and new developments at Safran Plus. So there's a tremendous focus on the client engagement and Safran making certain that is part of the Capitec family.
So we see those 3 components as crucial of our strategy going forward. The future, everyone is asking us about the future. I think if you look at the future, I think we first need to start with International? If I look globally, we all know that the vaccine rollout has actually moved has brought up in Europe and America and all other countries. Americas at about 55%.
The UK is at 65%, Europe itself is at 45%. There has been a very strong stimulus packages given in Europe and America. So that is stimulating the economy. So when I'm talking to investors and people abroad, you can clearly see that the world is starting to normalize and people Just getting back to normal situations. That has got a very positive impact on South Africa.
We've seen what the rand dollars As Dan, I think if we ask any one of you 6 months ago, Will Durant be at $13.75 or $13.85 we would have laughed, but there it is. There's a very strong market for our commodities and for marine beer prices as Plant and that is very good for South Africa. We've also had on the food side and especially on the farming side, we've done exceptionally well. So for the first time So this 2,002, we had a surplus on our current account and we had a very strong inflow in tax income. And I think a good portion of that tax Income is actually coming from our SA commodities.
So that is plus, a very positive trend. And then I think, Yeah. What is happening in government, what is happening, meaning on the A and C front, I think what it's Done is bringing a culture of accountability and a culture of doing the right things. And I think we won't see the effects We'll see it over time. But I think overall that will have a very positive effect in South Africa.
And then, yeah, if you look at the results of companies as it's coming through now, you can see much better results coming through for all companies right through. What are we seeing in Capitec? We've seen offline inflows apart from hospitality basically at the same levels. We're starting to see overtime coming in, people starting to By overtime and we start seeing appointments happening. So I think that is very positive.
On the demand side for credit, Applications were about 15%, 20% down up to about February. And we're basically now March April May, we're Basically back to normal levels on that. I've already mentioned the replenishments and debt. We're seeing on the replenishments, just To give an indication, we see about a 20% to 30% drop in replenishment rates coming through and on debt. I think this is going to be interesting to see what fee is going to be, but we're seeing very positive things trends coming through from there.
And then we're seeing very strong transactional volumes happening right across the group. If I look at our merchant base, About 26,000 merchants that's transacting. They're basically back to pre COVID levels. So if you look at this, it is all Showing signs in the right direction. And then we've spent quite a lot of myself plus our senior exec team has spent quite a lot of time Visiting our branches, especially branches in the rural areas, Haysey View, Bospor Grand, all those particular areas.
And we're seeing a strong positiveness of people in those particular sectors and a strong informal growth coming through. And I've always said many times, I think it's the one part of the economy that we are estimating completely. I think the factors to worry about is our 3rd wave. I think it's here. The question is how we're going to react and what the impact is going to be.
The vaccine rollout is starting to happen. And hopefully by the end of this year, we will have 50%, 60% of South African We're vaccinated. I think the 2 or the 3 that worries me the most is our high unemployment rights And the inequality gap that has been caused by COVID, because if I just look at education for us is very important. I think for South Africa to be successful It's important. And if you haven't had access to a laptop or data, it was very difficult to get education in South Africa during COVID.
So I think that inequality gap is still going to create problems for us going forward. And then I think the interesting one is the wage gap Well, the waste negotiations, government is very it starts these no increases. And I think if you look at what the demands of the unions are, Very unrealistic coming up for 15% minimum wages of ZAR15000. It doesn't make sense. So it shows you that there's a big gap Understanding really what's happening in South Africa and what we need to do to actually correct South Africa.
So I think overall, we're seeing a recovery. I think the concerns is the ones that are highlighted. I think the most important thing is for government to actually implement all the strategies that I have actually spoken about and that I want to implement. Think that's the key to my South Africa, a successful company. If I look at what are we going to focus on, I think the most important thing is scale.
We've got 16,000,000 clients now on our base and how do you optimize that? How do we make That we are first of wallet. How do we make certain that they actually make use of our forward range? Then partnerships, I think we've done a very good job We're partnership with Sanlam SAE Home Loans, Easy Equities. So we'll continue to look and say how can we partner, Work with certain people that's strategic importance for ourselves, partner with Fintechs especially.
So that will be a big focus. Then digital and data we believe is going to be the most important going forward. Data, the whole payments e commerce crisis for us Important. If you kind of look at China now, if you want to pay with cash, you can't. And I think we need to So I have that and it's not only Capitec, but it's the South African brutality because we need to get people to do the electronic payments.
Because the moment you can start your electronic payments, You can then provide a bank account to informal sector or small businesses and you can score, you can provide credit. There's a lot of opportunities then. And then data, I don't think I need to elaborate on data. I think everyone knows it's the new world. The new solutions, we're focusing quite a lot on credit and payments.
And then on the rewards program, we've always said, We will not go into loyalty the way other people has gone in with points. We will keep it simplistic and that will be launched quite soon. Then business banking. Business banking is on track. We're building something completely unique on a digital platform.
And we're still on track to launch that mid next year. If I look at what we need to deliver, I think the most important is you can't deliver anything if you haven't got people. So for us, it's all about developing talent and growing future leaders. If I look at the most important thing is to really understand the needs of our clients. That's why we're spending quite a lot of time in The market understanding what's happened because during COVID, we were sitting in our offices at home and we didn't understand what was happening.
So we're spending a lot of time Out there and I think fly and lease is going to change quicker and quicker and quicker. Then we need to align the objectives of retail and business banking. I believe there's big opportunities Combine those objectives and align it. And then culture, there's a saying that culture is a strategy for breakfast, we are a strong believer in that. And we will continue building our culture and making certain that our staff and our people Make decisions without thinking because it's actually part of their DNA.
In talent, we continue to appoint you people that's I'll share it with the Board this morning. We currently need to deploy in the next 3 to 4 months about 500 people. About 300, 400 of them is in your digital IT space, client centric and innovation. And we're We're struggling to find the right SKU levels in South Africa. So I think that's a big opportunity for ourselves and make certain that we get that right people and we develop them.
And then, yes, working from home, working from the office, we're strong believers that you can't only work from home or you can't only work from office. You need to have a Balance fee, nice to and we've worked quite hard in the last couple of months to make certain we finding out the right balance and we have that flexibility Workwise 3, we can move our people back. And the moment, with positive signs coming through, we can actually bring the people forward. And then multi skilling, it's interesting with direct lending now, which is situated in Belleville. We've created the capabilities That we can use our extra capacity in our branches to help giving direct loans to our staff.
So at the moment there's a fee And a particular branch is quiet. We can move those volumes to that particular branch and make certain we can help our clients. So we believe multi skilling and micro jobbing That's the future. We also believe there's a big opportunity to South Africans to actually use their skills and sell their skills abroad, but actually sit in South Africa And you don't need to move. And then sorry, I've missed that.
I think if we look at the year ahead, We're very positive. We believe in the brand. We believe in what we've built. So we're positive about the future. Thank you very much.
Okay, any questions now? I think the first question, I will just read it out. It was indicated that reinsurance providers covered retrenchment and life Cover for customer loans have expired. The better insurers decided that the COVID-nineteen risk was too great or what was the reason. Capitec was forced to self insure as a If we measure it, no mention was my if this result in the loss of the company considering the premiums versus the payments settled.
Will Capitec plan to in future use reinsurance again? I think, yes, when you so one thing that COVID has learned us when it came to renew our insurance, Nobody wanted to touch retrenchments. So we had to go into ensuring it ourselves. We still managed to get debt insurance. I think we've showed very clearly in our financial results and I know I've covered it in my presentation in April We still might have a profit out of insurance in totality.
I think it's learned us and to say it better, why do we need reinsurance? So currently we self insured, but it will be something that we will cover from time to time. Second question is the takeout of Bank of Lisbon Subsequently called the Mercantile Bank has resulted in soft changes and introduction of Capitec personnel into the bank. This is Lev. The word of Portuguese speaking persons who were the background of the Mercantile Bank clients.
Are there at least some existing We're capable of speaking Portuguese that can be used to pull this word. If I look at Mercantile, there's all people that could speak. Portuguese is still there. That's still part of us. Nobody was referenced.
Nobody was asked to leave. But I think what we definitely are doing is we want to create a business bank for all South Africans. So We will be much certain that we can handle all languages. I think a big factor of that is if you look at our branches, We do it deeper from the community to serve the community. And I think we will use the same approach when it comes to Mercantile or Capital Business Banking.
I think there's no more questions. Andreas, is there any other questions? No further questions. Thank you very much. Normally, we would have offered wine, but there's virtual.
So have a glass of wine on Friday afternoon. Thank you very much.