The bank said it had continued to strengthen its balance sheet by diversifying its funding base between retail deposits and wholesale funding. Pictures: Simphiwe Mbokazi, ANA.
The bank said it had continued to strengthen its balance sheet by diversifying its funding base between retail deposits and wholesale funding. Pictures: Simphiwe Mbokazi, ANA.

African Bank reaches R10 billion in retail deposits

By BR Reporter Time of article published Sep 8, 2021

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Financial services African Bank this week reported R10 billion in retail savings and investments, up from R5bn in August 2020.

The bank said it had continued to strengthen its balance sheet by diversifying its funding base between retail deposits and wholesale funding.

Marlin Janeke, group treasurer said: “The exceptional growth in retail deposits over the past years is testament to South Africans’ trust in African Bank. We are delivering on a strategic decision to offer enhanced value to our customers by offering the best interest rates in South Africa, on cash investments across all of our savings, investments and MyWORLD portfolios. This approach has clearly been well received by our customers.”

The bank expects retail deposits to comprise more than 60% of its funding base by the next reporting period, with the remaining 40 percent comprising wholesale funding.

“A large component of the wholesale funding comprises debt issued under its Domestic Medium-Term Note (DMTN) programme, which remains important to African Bank for funding flexibility. A small percentage of the bank’s wholesale funding comprises debt raised under the Euro Medium Term Note programme, which is more costly than the DMTN programme, and which the bank is not refinancing as these Swiss Franc based loans mature,” it said.

Janeke said approximately 60 percent of customer investments were in the long-term 60-month investment product, which offers customers a return of 8.8% per annum, equivalent to 10.50% per annum calculated on expiry after the 5-year period.

“Customers typically chose to reinvest 50% of their savings on maturity of the investment. The high reinvestment rate of customers provides the bank with greater predictability in terms of pricing and liquidity,” African Bank said.

Janeke said: “We are pleased to provide value to our customers with regard to their investments and will continue to offer competitive interest rates to investors who seek to extract the most value out of their cash investments.”

BUSINESS REPORT ONLINE

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