African Bank reports over R500m profit as it expands offerings

Johannesburg - African Bank has announced a net profit of R523 million for the 2024 financial year, reflecting a strong performance amid a challenging economic climate.

With a capital adequacy ratio of 31.4% and significant liquidity reserves of R7.1 billion, the bank continues to demonstrate its resilience while driving strategic growth under its transformative 'Excelerate25' strategy.

"This year's performance affirms African Bank's ability to deliver value even in a constrained environment. Our focus on diversifying revenue streams and providing innovative, customer-centric solutions positions us as a key player in South Africa's financial sector," says Group CEO Kennedy Bungane.

The results highlight the progress of African Bank's diversification efforts. Net advances grew by 8% to R34.4 billion, with secured business and commercial lending now making up 38% of the bank's advances. Personal banking, meanwhile, continues to attract customers, contributing to a 36% year-on-year increase in the bank's customer base, which now totals 5.4 million.

Interest income reached R7-billion, despite a deliberate shift towards lower-risk, secured lending. Non-interest income grew by 14% to R1.54 billion, bolstered by increased use of the MyWORLD transactional accounts and credit cards, as well as the expanding insurance offerings. Credit impairment charges improved significantly, down 20% from the previous year, resulting in a lower credit loss ratio of 6.3% (FY23: 8.0%).

"These numbers represent more than just financial success ‒ they reflect our ongoing commitment to building a diverse, scalable, and sustainable business that can serve South Africans better," Bungane adds.

The bank's progress in Personal and Business & Commercial banking includes innovative new offerings such as renewable energy financing, handset financing through mobile partnerships, and a pilot home loans program for staff, which will expand to the broader market in 2025. African Bank also strengthened its presence in the Business & Commercial banking sector with the divisionalisation of Grindrod Bank, and the acquisition of Sasfin's Commercial Property Finance and Capital Equipment Finance businesses, providing crucial support to SMMEs and entrepreneurs.

With its IPO journey firmly on track for 2027/28, African Bank is aligning its growth ambitions with governance and risk management improvements, ensuring a solid foundation for the future. Bungane says: "We are not just meeting today's needs ‒ we are building a bank ready for tomorrow."

African Bank says it remains committed to financial inclusion and economic development, as evidenced by its continued support for underserved communities, its expanding suite of products, and its ability to adapt in an ever-evolving economic landscape.