Johannesburg - Coronation Fund Managers, which apologised to investors for losing money when African Bank Investments Ltd collapsed, reported a 38 percent surge in profit after reaping more inflows than peers.
Net income rose to 2 billion rand in the fiscal full-year through September, from 1.45 billion rand, the Cape Town-based fund manager said in a statement today that didn’t mention African Bank.
“The retail business continued to attract a disproportionate level of industry flows, with total net inflows amounting to 32 billion rand,” the firm said.
“Coronation is a cyclical business that has benefited from strong markets.”
Coronation was the biggest shareholder in Abil, as it’s known, which failed in August as losses rose and creditors withdrew funding.
Over three days, Coronation cut its stake to less than 9 percent from 22 percent.
Rival fund manager Allan Gray increased its holdings, betting the bank would be rescued and shareholders would be offered an opportunity to profit from its return to the market.
“Losses have been incurred, for which we apologise,” Coronation said in an August 12 statement.
Abil didn’t have a significant impact on the performance of any of the funds holding the stock, it said at the time.
South Africa’s central bank has arranged a plan to salvage Abil’s viable assets and the lender’s curator expects an initial public offering to be held by March next year.
Coronation, which manages the equivalent of about $52 billion (R587 billion), gained as much as 3.6 percent in Johannesburg trading, the biggest intraday advance for a month, and was 1.6 percent higher at 96.60 rand as of 10:21 am. - Bloomberg News