NovaBank SA — Financial Plan — Key Assumptions
The key financial assumptions — customer growth, ARPU, cost-to-serve, credit-loss and funding assumptions — underpinning the five-year financial model.
Section 11 · Business Plan
Financial Plan — Key Assumptions
The key financial assumptions — customer growth, ARPU, cost-to-serve, credit-loss and funding assumptions — underpinning the five-year financial model.
The financial projections that follow have been built on a granular,
driver-based model. The model uses customer cohorts, product-by-product
unit economics, and bottom-up cost build. The principal assumptions are
summarised below; sensitivity analysis is provided in Section 16.
11.1 Macro & Regulatory Assumptions
| Assumption | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| GDP Growth (%) | 1.6% | 1.8% | 2.0% | 2.0% | 2.1% |
| CPI Inflation (%) | 4.7% | 4.5% | 4.5% | 4.5% | 4.5% |
| SARB Repo Rate (year-end) | 7.25% | 7.00% | 7.25% | 7.50% | 7.50% |
| Prime Rate | 10.75% | 10.50% | 10.75% | 11.00% | 11.00% |
| Corporate Tax Rate | 27.0% | 27.0% | 27.0% | 27.0% | 27.0% |
| USD/ZAR (year-end) | 18.40 | 18.80 | 19.20 | 19.60 | 20.00 |
11.2 Customer & Volume Assumptions
| Driver | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Total Customers (m) | 0.45 | 1.40 | 2.85 | 4.65 | 6.50 |
| Active Customers (m) | 0.32 | 1.05 | 2.20 | 3.75 | 5.40 |
| Active Rate (%) | 71% | 75% | 77% | 81% | 83% |
| Avg Deposit per Active Customer (R) | R1,850 | R2,400 | R2,950 | R3,350 | R3,800 |
| Avg Loan Take-up Rate (%) | 8% | 12% | 16% | 21% | 24% |
| Avg Loan Size (R) | R12,500 | R14,200 | R15,800 | R17,200 | R18,500 |
| Loan Default / Charge-off Rate | 5.5% | 6.8% | 8.0% | 7.4% | 6.4% |
11.3 Pricing & Yield Assumptions
| Driver | Value | Notes |
|---|---|---|
| Net Interest Margin (Yr 5) | 9.5% | Blended across deposits & loans |
| Avg Loan Yield (gross APR) | 20.5% | Personal loans, NCA-compliant |
| Avg Deposit Cost | 5.8% | Blended savings + term |
| Avg Monthly Account Fee | R5 | Below Big-4 average of R75 |
| Avg Transaction Fee Income | R32 / month / active | Cards, EFTs, payments |
| Cost-to-Income Target (Yr 5) | 38% | vs Big-4 avg of 55% |
| NPL Ratio (Yr 5) | 6.4% | Stabilises below SA peer avg |
| Credit Loss Coverage Ratio | 115% | Stage 3 ECL / NPL |
11.4 Modelling Approach
All projections are presented in nominal South African Rand. The
model has been built in line with IFRS 9 requirements for Expected
Credit Loss provisioning, Basel III capital adequacy under SARB
Directive D/2024-01, and SARB BA Returns reporting standards. The model
includes cohort-level customer behaviour, product-level unit economics,
and full three-statement integration (P&L, Balance Sheet, Cash Flow)
with monthly granularity in Years 1–2 and quarterly granularity
thereafter.
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.