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AFRICAN BANK HOLDINGS LIMITED - Unaudited Consolidated Interim Financial Results for the six months ended 31 March 2025

Release Date: 26/05/2025 07:30
Wrap Text
Unaudited  Consolidated  Interim Financial Results for the six months ended 31 March 2025

AFRICAN BANK LIMITED
(Incorporated in the Republic of South Africa)
(Registered Bank)
(Registration No. 2014/176899/06)
LEI: 2549008X8SL1B1J86F98
Company code: ABKI
(the "Bank" or "African Bank")

AFRICAN BANK HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration No.: 2014/176855/06)
Company code: ABLI
LEI: 254900UUEMIK0XL5A056
("ABHL" or the "Group")

RELEASE OF THE UNAUDITED INTERIM FINANCIAL RESULTS FOR THE CONSOLIDATED
AFRICAN BANK HOLDINGS LIMITED GROUP, AND RELATED AFRICAN BANK LIMITED
INFORMATION FOR THE SIX MONTHS ENDED 31 MARCH 2025

African Bank Holdings Limited ("ABHL" or "African Bank Group") is pleased to announce
that the ABHL Group and its subsidiary company, African Bank Limited ("ABL" or "Bank"),
released their unaudited interim financial statements for the six months ended 31 March
2025 ("H1 25") ("Group consolidated results", and "Bank consolidated results" respectively)
today. The prior year comparative interim financial statements are for the six months ended
31 March 2024 ("H1 24"). The comprehensive ABHL Group consolidated results are addressed
first, followed by the Bank consolidated results.

ABHL consolidated results – diversification strategy starting to show green shoots while
operating in a volatile environment.

The African Bank Group continues to focus on the implementation of its 'Excelerate'
strategy, which focuses on building a fully-?edged bank with both Personal and Business &
Commercial offerings. We remain confident that we will deliver on our mission of building
a customer centric, data and digitally enabled diversified business that is scalable and
sustainable and that will have a compelling listing proposition in the future.

Our focus on growing and cross selling into our client base and expanding our product
o?ering continues to contribute towards a more diversified business with multiple revenue
streams. The deliberate derisking and diversifying into Business & Commercial, and the
widening of our Personal Banking offering with secured lending products while subduing
growth in unsecured lending, continued in this reporting period.

Having concluded the acquisition of Sasfin's commercial property finance business in August
2024 of the previous financial year, the Business & Commercial team also successfully
concluded the acquisition of Sasfin's capital equipment business in this reporting period.
Adding these capabilities will fuel the Group's Business & Commercial growth strategy. As
we celebrate the 50th anniversary since the founding of African Bank in 1975, we remain
positive about the opportunities to provide enhanced services to underserviced Small,
Medium and Micro Enterprises ("SMME") and entrepreneurs, and so fulfil our founding
fathers' vision in the business & commercial arena.

Our Personal Banking division continues to advance credit while expanding its suite of
products and service o?erings with the piloting of a secured home loans to staff, financing
of renewable energy household solar solutions and tech-deals, including finance for handset
subscriptions o?ered by mobile companies. Our Personal Banking customer base continues
to grow due to the unique MyWORLD transactional account, our accompanying high level of
customer service, our competitive savings & investment rates and the expanding insurance
product offering.

The diversification of the African Bank Group balance sheet continues to progress well and
consists of:
   • Net advances of R39.1 billion (H1 24: R32.7 billion), representing robust growth of
       20% in this reporting period, with Business & Commercial growing by 49% while
       Personal Banking grew by a modest 3%,
   • An increasing funding base growing by 8% to R36.3 billion (H1 24: R33.5 billion)
       mainly funded by customer deposits representing 91% (H1 24: 91%) of total funding
       while maintaining the confidence of the debt capital markets,
   • Adequate liquidity with cash reserves, excluding statutory asset requirements,
       totalling R3.7 billion (H1 24: R7.9 billion) having moderated following the
       deployment of cash reserves into Business & Commercial advances, and
   • A capital adequacy position in excess of our regulatory and internal minimums, with
       a total capital adequacy ratio of 28.0% (H1 24: 32.5%) as asset growth continues. The
       Prudential Authority ("PA") raised concern regarding a capitalisation transaction.
       The Group has adopted a conservative approach and has adjusted for the financial
       impact. The capital ratio shown above has been adjusted accordingly. Including this
       transaction, the capital ratio would be 29.6%. We are currently engaging with the
       PA.

The Group reported a satisfactory increase in net profit after tax for the six months ended
31 March 2025 of R202 million (H1 24: R176 million), up 15%.

Reviewing the various elements of the Group's operational performance:
   • Interest income increased by 6% to R3.7 billion (H1 24: R3.5 billion), positively
      impacted by the growth in the Business & Commercial loans book,
   • Cost of funding continued to be well managed at 7.9% (H1 24: 7.8%) with the addition
      of the more expensive Tier 2 funding,
   • Non-interest income (net of related card and transaction fee costs) grew by 39% to
      R909 million (H1 24: R652 million) as usage of the transactional MyWORLD and credit
      card accounts by customers increased, further bolstered by various non-transactional
      revenues which includes fees, commissions and unclaimed balances,
   •   Net insurance income increased by 8% to R308 million (H1 24: R286 million), with the
       improvement of claims management,
   •   Operating expenses increased by 16%, with a cost to income ratio of 62.0% (H1 24:
       56.1%) as the group continues to invest in its transformation journey to build a data
       and digitally enabled fully-fledged personal and business & commercial bank, and
   •   Credit impairment charges continued to improve by 10% to R1 222 million (H1 24: R1
       355 million) resulting in a corresponding reduction in the credit loss ratio to 5.3% (H1
       24: 6.6%), following the intentional book diversification to secured Business &
       Commercial lending, and improved credit risk management including regular book
       sales aligned to industry practice in Personal Banking.

In line with our Excelerate strategy of being a bank for the people, by the people, serving
the people, the African Bank Group's diversification and scaling of the business continues,
as evidenced by the 6.1 million customers (H1 24: 5.7 million) serviced on our platform, up
6% from a year ago. The Personal Banking customers who have transactional bank accounts,
credit (including the piloting of secured home loans), savings and investment, funeral and
credit life products increased by 28% to 2.4 million. Our Alliance Banking gives us access to
3.6 million customers to use solutions provided through our partnership with Shoprite
Checkers, Lesaka and MTN's Momo. This customer base is marginally down by 4% from a
year ago. Business & Commercial is already serving 23 thousand entrepreneurs across
investments, secured and unsecured loans.

Looking towards the future, we continue our focus on driving growth and building on this
solid financial position, in line with our Excelerate strategy.


Bank consolidated results

The Bank's consolidated Interim Financial Statements represent the financial position and
financial results of African Bank, and its wholly owned subsidiaries.

Like the Group's financial results above, the Bank's consolidated operating performance has
improved, with the net after tax loss reducing to R98 million (H1 24: R109 million loss). See
the results publication material below for more detail.



Results publication material

The following published documents are accessible on African Bank's website at
www.africanbank.co.za under the "Investors/Financial Reporting" section:

1. African Bank Holdings Limited unaudited group consolidated interim financial
   statements for the six-months ended 31 March 2025;
2. African Bank Holdings Limited group investor presentation;
3. African Bank Holdings Limited group interim results booklet for the six-months ended 31
   March 2025;
4. African Bank Limited consolidated unaudited interim financial statements for the six-
   months ended 31 March 2025; and
5. African Bank Limited and African Bank Holdings Limited Basel Pillar III Disclosure
   documents as at 31 March 2025.

The above disclosures have not been audited by the Group's external auditors.

Webcast details, presentation material and playback facility

Interested parties are invited to register for a webcast during which Kennedy G Bungane,
ABHL Group CEO, and several executives, will take participants through the ABHL
consolidated interim results. Details of the webcast are:



 Date            Monday, 26 May 2025
 Time            10h00 SAST/CAT
 Presentation    Interested parties are requested to click here for access to the webcast

A recording of webcast will be available on the Bank's    website   at
www.africanbank.co.za under "Investors/Financial Reporting".

26 May 2025

Debt sponsor
The Standard Bank of South Africa Limited

Date: 26-05-2025 07:30:00
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