JUST after five years since African Bank was relaunched, it has rebuilt public trust reaching R10 billion in retail deposits and recording a hike of 120 percent in new customers last month – major milestones despite the chaos of Covid-19, the lender says.
“African Bank continues to strengthen its balance sheet by diversifying its funding base between retail deposits and wholesale funding. This week, the bank reported R10 billion in retail savings and investments, up from R5bn in August 2020,” it said.
African Bank appointed Kennedy Bungane as chief executive in May.
The bank swung from an interim loss of R158 million last year to a net profit after tax, of R152m, for the six months ending March.
Sbusiso Kumalo, the chief marketing officer, said, “We knew it was going to be tough and would probably take longer than we would have liked, but our strategy was clear – we needed to diversify our range of products and services and move from a single-product business, operating through a single channel, to a diversified financial services business, which would be inclusive and attract more customers. We had to build our Omni-channel IT platform from scratch, and that in itself was a momentous task.”
The bank expected retail deposits to comprise more than 60 percent of its funding base by the next reporting period, with the remaining 40 percent comprising wholesale funding.
Marlin Janeke, the group treasurer said 60 percent of customer investments were in the long-term 60-month investment product, which offered customers a return of 8.8 percent per annum, equivalent to 10.5 percent per annum calculated on expiry after the five-year period.
Customers typically chose to reinvest 50 percent of their savings on maturity of the investment.
African Bank launched its transactional product MyWORLD in May 2018. It had attracted more than 365 0000 customers with an average balance of about R2 000 each. Its retail portfolio, which is sitting at just more than R10bn, shows growth of close to 1 000 percent since its R1bn high in 2018.
Kumalo said: “The agility that we have built into our digital solutions and low-cost operating models, allows us to continually adapt the nature of the financial products and services that we offer. It enables us to influence the rapid adoption of these services across our digital platforms.”
Three years after participating in the SA-csi survey, African Bank jumped from fourth place in 2018 to first place in 2019, also leading in two of the product categories, of which Savings and Investments was one.
Last year, it came in a close second, outperforming several larger banks during the height of the pandemic.
BUSINESS REPORT