NovaBank SA — Capital Adequacy & Funding Plan
The capital-adequacy position — CET1 and Tier 2 capital, risk-weighted assets and regulatory ratios — and the staged funding plan.
Section 15 · Business Plan
Capital Adequacy & Funding Plan
The capital-adequacy position — CET1 and Tier 2 capital, risk-weighted assets and regulatory ratios — and the staged funding plan.
Capital adequacy is the single most binding constraint on a new
bank’s growth. NovaBank’s capital plan is designed to maintain capital
ratios significantly above SARB minima throughout the planning period,
while simultaneously delivering investor-relevant returns on equity by
Year 5.
15.1 Capital Adequacy Trajectory
15.2 Capital Composition
| ZAR millions | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Common Equity Tier 1 (CET1) | 1,025 | 2,160 | 2,510 | 3,780 | 6,220 |
| Risk-Weighted Assets (RWA) | 4,560 | 11,750 | 15,510 | 25,030 | 43,200 |
| CET1 Ratio (%) | 22.5% | 18.4% | 16.2% | 15.1% | 14.4% |
| Regulatory Minimum CET1 | 8.0% | 8.0% | 8.0% | 8.0% | 8.0% |
| Headroom Above Minimum | 14.5% | 10.4% | 8.2% | 7.1% | 6.4% |
| Tier 2 Capital | 73 | 165 | 200 | 300 | 350 |
| Total Capital | 1,098 | 2,325 | 2,710 | 4,080 | 6,570 |
| Total Capital Ratio | 25.8% | 21.4% | 19.0% | 17.8% | 17.0% |
| Regulatory Minimum Total | 11.5% | 11.5% | 11.5% | 11.5% | 11.5% |
15.3 Liquidity Ratios
| Liquidity Metric | SARB Min. | Year 1 | Year 3 | Year 5 |
|---|---|---|---|---|
| Liquidity Coverage Ratio (LCR) | >100% | 168% | 135% | 118% |
| Net Stable Funding Ratio (NSFR) | >100% | 142% | 118% | 108% |
| Loan-to-Deposit Ratio (target <100%) | — | 139% | 111% | 101% |
| High-Quality Liquid Asset Buffer | — | ZAR 415m | ZAR 1,750m | ZAR 3,560m |
15.4 Funding Strategy
The funding strategy emphasises the steady migration from
primarily-wholesale to primarily-deposit-based funding as the customer
base scales:
- Year 1–2: Bridge funding from wholesale lines and Tier 2 issuance
while customer deposits build. - Year 3 onwards: Customer deposit franchise becomes the dominant
funding source, as is typical for a successful retail bank. - Throughout: Diversification across short, medium, and long-tenor
wholesale instruments; a senior unsecured note programme (under DMTN)
launched in Year 4. - Treasury policy maintains a minimum 60-day liquidity buffer at
all times under stressed assumptions.
Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of NovaBank SA (Pty) Ltd.