African Bank reports third straight year of rising profit
JOHANNESBURG - African Bank reported a third successive year of increasing profits on Tuesday, saying its net profit after tax for the year ended September 30 was up 13percent to R 1.15 billion.
The successes during 2019 were achieved in a challenging macroeconomic environment with the South African consumer remaining under financial pressure, and the bank would remain prudent in its credit underwriting, CEO Basani Maluleke said.
“We have made good progress in achieving our strategic objectives. One of the Bank’s most important strategic objective is the diversification of its product offering," she said.
Maluleke said the bank's transactional product, MyWORLD, would significantly accelerate African Bank's efforts to diversify its revenue streams and broaden its customer base, while aiding efforts to better understand customers, attract additional retail deposits and grow digital capabilities.
African Bank said the increase in net profit was largely due to improvements in the origination of its loan book and the collection of outstanding balances. An improvement in the insurance results and a more efficient balance sheet also had a positive effect.
The bank continued to be a responsible provider of unsecured credit, providing consumers access to personal loans and credit cards.
"The South African consumer, however, remains under financial pressure against a muted economic backdrop. We have therefore reassessed the affordability of our customers and taken proactive steps to manage our credit risk through additional provisioning overlays and a reassessment of our credit underwriting criteria," it added.
The business continued to operate with robust levels of capital and liquidity, with levels of the latter impacted positively through the increase in retail deposits, which represented 12 percent of the funding base.
“In the year ahead, in addition to our credit sales, we will invest in the sales of MyWORLD, our funeral product, as well as our retail deposit products," said Maluleke.
"We also plan to launch new products to further diversify our offering and meet customer needs. We will also focus on the further development of our big data capabilities, which will enable us to optimise costs, improve our credit underwriting and collections and move us closer to becoming a leader in customer satisfaction.”
- African News Agency (ANA)