Latest news with #KennedyBungane
IOL News
28-05-2025
- Business
- IOL News
African Bank reports 15% profit growth, paving the way for a bold future
African Bank, which has future plans to list on the JSE, reported a 15% surge in group net profit after tax, reaching R202 million for the six months ended March 31, 2025, driven by its ambitious Excelerate strategy as it aims for a JSE listing ahead "The results reflect the growing impact of its Excelerate strategy, as the Group continues its transformation into a diversified, fully-fledged banking institution serving both personal and business customers," African Bank said. The robust results came despite the South African economy remaining under pressure due to persistent unemployment, structural inefficiencies, and an increasing burden on welfare spending by the government. "However, the easing of inflationary pressure, further aided by the South African Reserve Bank's decision to cut and pause further interest rate reductions, has presented a bit of cautious optimism in the market," African Bank said. CEO Kennedy Bungane hailed the results as a testament to the bank's strategic pivot. 'These figures are more than a financial milestone; they reflect our commitment to empowering South Africans, from township entrepreneurs to families investing in sustainable solutions like solar power,' he said. Celebrating its 50th anniversary, African Bank is positioning itself as a cornerstone of inclusive finance, with a 6% increase in its customer base to 6.1 million and a 20% rise in net advances to R39.1 billion. The bank's Business and Commercial lending arm saw a striking 49% growth in advances, bolstered by strategic acquisitions, including Sasfin's capital equipment finance business, following last year's purchase of its commercial property finance division. These moves have strengthened African Bank's foothold in the small and medium enterprise (SMME) sector, a critical driver of South Africa's economy. Financially, the bank maintained a robust funding base of R36.3 billion, up 8%, with customer deposits accounting for 91% of the total. A strong capital adequacy ratio of 28% - well above regulatory requirements - underscores its stability. Non-interest income soared 39% to R909 million, fueled by growing adoption of digital offerings like the MyWORLD transactional account and credit card services. Improved risk management and a shift to secured lending reduced credit impairment charges by 10%, lowering the credit loss ratio to 5.3%. Chief Financial Officer Anbann Chetti said the results validate the group's strategy and operational focus, 'Our Excelerate strategy is reshaping African Bank into a scalable, future-ready institution. We're delivering value not just for shareholders but for employees and communities.' As part of its pre-initial public (IPO) offering roadmap, African Bank launched iKamva Lethu, an employee share ownership scheme allocating 10% of its shares to staff. "Work is also well underway on the next phase of our pre -IPO journey, which includes the finalisation of amanagement share scheme, and the creation o fretail BEE (Black Economic Empowerment) scheme, following the decision of theGovernment Employees Pension Fund to be a long term shareholder beyond the IPO of the bank. These efforts will culminate in our eventual listing targeted for post the release of our FY27 results, market conditions permitting," Bungane said. Looking ahead, African Bank plans to expand secured lending, launch a digital SMME lending platform, and invest in digital infrastructure, compliance, and cybersecurity. Bungane said, 'This journey is about building a bank that belongs to South Africans, one that serves with integrity and purpose. As we prepare for a future listing, we remain guided by our founders' bold vision and the needs of the communities we serve.' BUSINESS REPORT
Zawya
27-05-2025
- Business
- Zawya
African Bank's acquisition strategy strengthens business and commercial offerings
African Bank Holdings Limited (ABHL) has reported robust interim results for the six months ending 31 March 2025, with Group net profit after tax climbing 15% year-on-year to R202m. These results underscore the momentum of its Excelerate strategy, as the Group accelerates its evolution into a diversified, full-service bank catering to both personal and business clients. Chief executive officer Kennedy Bungane said the Group's performance affirms the strategic choices made in recent years and underscores a return to African Bank's original mission of financial inclusion. 'These results are more than a financial milestone, they mark a reaffirmation of purpose,' said Bungane. 'They show that our customer-first, innovation-led approach is reaching South Africans where it matters most. Whether it's a township entrepreneur accessing capital or a family investing in solar power, African Bank is delivering impact.' Net advances grew 20% to R39.1bn, with a strong 49% surge in Business and Commercial advances. The Bank also reported a solid 6% increase in its customer base to 6.1 million, driven by growth in both its Personal Banking and Alliance Banking platforms. 'Our shift toward a broader product mix, particularly into secured lending, is building resilience into our business while unlocking new revenue streams,' added Bungane. 'As we celebrate 50 years since our founding, we are actively shaping a future where more South Africans have access to the capital, tools and services they need to thrive.' Diversification drives growth African Bank's diversification drive includes the successful acquisition of Sasfin's capital equipment finance business, which follows last year's acquisition of its commercial property finance division. These additions strengthen the Bank's Business and Commercial proposition and expand its footprint in the SMME sector. The Group continues to maintain a healthy funding base, which grew by 8% to R36.3bn. Customer deposits remain the primary source of funding, comprising 91% of the total. The Group's total capital adequacy ratio stands at 28%, well above regulatory minimums. Non-interest income grew by 39% to R909m, driven by increased uptake of the Bank's digital offerings, including the MyWorld transactional account and credit-card services – demonstrating increasing trust in the Bank and its services. Credit impairment charges declined by 10%, bringing the credit loss ratio down to 5.3%, thanks to strengthened risk management and a shift towards secured lending. Chief financial officer Anbann Chetti said the results validate the Group's strategy and operational focus: 'Our Excelerate strategy is not only delivering earnings growth but also reshaping the fundamentals of our business. We are building a scalable, diversified, and future-ready financial institution that is creating real value for shareholders, employees and society.' As part of its Pre-IPO roadmap, African Bank launched its employee share ownership scheme, iKamva Lethu, allocating 10% of the bank's shares to staff. Additional broad-based empowerment initiatives, including a retail BEE offering and a management scheme, are under development. Looking ahead, African Bank will expand its secured lending offerings, launch a digital SMME lending platform, and invest further in digital infrastructure, compliance, and cybersecurity. Bungane concluded: 'This journey is about building a bank that belongs to South Africans, one that serves with integrity and purpose. As we prepare for a future listing, we remain guided by our founders' bold vision and the needs of the communities we serve.'
