African Bank announces FY net profit after tax of R736m, up 38%

• Group profitability increases by 38% to R736m (FY21: R534m)
• Strong retail loan disbursements growth of 87% to R14bn
• Group’s balance sheet remains liquid with adequate cash resources of R2.8bn and a diversified funding mix
• High equity capital levels of R11.9bn, resulting in a total group capital adequacy ratio of 43.4%
• Retail deposit growth of 15% year-on-year, resulting in R10.8bn deposit book

Johannesburg - The African Bank and its holding company, African Bank Holdings Limited has today announced its full year results, reporting a net profit after tax of R736m – up 38% - in a year of what CEO Kennedy Bungane refered to as impressive growth and strong delivery.

The banking Group released its audited annual financial statements for the year ended 30 September 2022 in Johannesburg this morning, which are the first set of results since the bank instituted its ‘Excelerate25’ strategy, launched towards the end of 2021. The bank said its strategy is based on five sustainability levers comprising customer satisfaction, social responsibility, environmental protection, inclusivity, and financial resilience.

Contributing to the bank’s strong results were an increase in retail disbursements of 87% (loans granted to customers) to R14bn from R7.5bn last year. MyWORLD transactional balances increased by 54% to R1.4bn.

In that respect, the number of MyWORLD active funded accounts has grown by almost 80% to 712 000. In addition, usage nearly doubled year-on-year with 35 million transactions with a Rand value of R45bn.

These results follow African Bank’s acquisition of Grindrod Bank, as well as the assets and liabilities of Ubank, both effective November 1, 2022. While these transactions are not reflected within the latest results, the acquisition of Grindrod will continue to expand the core of the African Bank business while the assets and liabilities of Ubank will strengthen the group’s core.

Bungane says: “These results demonstrate the bank’s continuing growth trajectory and increasing penetration into the important retail banking market, underpinned by our driving philosophy of building a South African bank rooted in customer-centricity – truly a bank for the people, by the people and serving the people.”

Bungane says the results also show that African Bank remains committed to reclaiming its heritage and building a bank that will advance the lives of South Africans across all walks of life as well as accelerating the building of a customer-centric, digital, and data-enabled business that will be scalable, diversified, and sustainable with a compelling listing proposition.

The group’s net customer advances balances grew by 38% to R22 647 million; retail savings and investment customer deposits increased by 15% to R10.8bn; and transactional MyWORLD balances increased by 54% to R1.4bn.

These strong results were largely attributed to robust retail loan disbursements exceeding pre-Covid-19 levels; the inaugural issuance of the first corporate loan adding to the group’s product diversification; a diversified funding mix; and an improvement in non-interest income, as more credit cards and transactional banking MyWORLD accounts were opened, and usage increased.

African Bank’s profits contribution to the group’s results continued to show significant improvement compared to the past year, with a net profit after tax of R341m. Looking ahead to next year, Bungane says in terms of Grindrod Bank, there will be a focus on strategy integration. Regarding Ubank, there are plans to leverage its unique market position in mining sector.

“Both acquisitions present important growth and development opportunities for impacted staff. We will also remain Laser focused on the execution of ‘Excelerate25’ with an updated operating model for business banking and consumer banking and continue to prepare for an initial public offering that includes an Initial includes engagement phase with strategic business partners.”