African Bank reported a loss of R311 million in the six months to March negatively impacted by the worsening macroeconomic conditions and the Covid-19 pandemic outbreak. Simphiwe Mbokazi/African News Agency (ANA)
African Bank reported a loss of R311 million in the six months to March negatively impacted by the worsening macroeconomic conditions and the Covid-19 pandemic outbreak. Simphiwe Mbokazi/African News Agency (ANA)

African Bank reports over R300 million loss impacted by Covid-19

By Sandile Mchunu Time of article published Jun 24, 2020

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DURBAN – African Bank today reported a loss of R311 million in the six months to end March that was negatively impacted by the worsening macroeconomic conditions and the Covid-19 pandemic outbreak.

African Bank, a 100 percent subsidiary of African Bank Holdings (ABH), reported R69m profit last year.  

The group said a significant Covid-19 specific provision, amounting to R550m, was processed in this reporting period, increasing the credit impairment charge. 

“The Covid-19 specific provision is a best estimate calculated on the information, such as collection data, available to the end of May 2020. Excluding the Covid-19 specific adjustment, the bank recorded a net profit after tax of R85m on a pre-Covid-19 adjustment basis,” the bank said. 

The bank’s total capital adequacy ratio remained at 36.6 percent. 

However, its transactional banking proposition, MyWORLD, which was launched in May last year continued to grow, with more than  258 000 accounts opened in the past 10 months.

Chief executive Basani Maluleke said the bank is extremely pleased with the increasing number of retail deposit customers who continue to show trust in the bank, as evidenced by the significant increase in savings and investments deposits of 158 percent on a year-on-year basis to R3.84 billion. 

“These deposits have continued to grow notwithstanding the Covid-19 lockdown. The bank continues to maintain robust capital levels and surplus liquidity,” Maluleke said. 

The bank said 50 percent of the R3.8bn in investments has been invested into the long-term 5-year fixed deposit product.

Its retail customer deposits, including transactional banking balances increased to R3.84 billion, up from R1.49bn while cash deposits, including surplus liquid assets, declined to R5.39bn compared to R5.99bn reported last year. 

BUSINESS REPORT

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