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AFRICAN BANK INVESTMENTS LIMITED - Uuaudited interim results and interim cash dividend declaration for the six months ended 31 March 2013

Release Date: 20/05/2013 07:05
Code(s): ABL ABLP     PDF:  
Wrap Text
Uuaudited interim results and interim cash dividend declaration for the six months ended 31 March 2013

African Bank Investments Limited	
(Incorporated in the Republic of South Africa)	
(Registered bank controlling company)	
(Registration number 1946/021193/06)	  
(Ordinary share code: ABL) (ISIN: ZAE000030060)	
(Preference share code: ABLP) (ISIN: ZAE000065215)

UNAUDITED INTERIM RESULTS AND CASH DIVIDEND DECLARATION FOR THE SIX MONTHS ENDED 31 MARCH 2013

Features
- Headline earnings decline by 26% to R1 015 million (H1 2012: R1 370 million)
- Headline earnings per share of 125,7 cents (H1 2012: 170,4 cents)
- Return on equity of 13,9% (H1 2012: 20,3%)
- Economic loss of R47 million (H1 2012: Economic profit of R390 million)
- Ordinary dividends per share of 25 cents (H1 2012: 85 cents)

Highlights
- 25% growth in advances to R59 billion
- 2,7 million customers, growth of 4%
- 1 600 strong distribution network
- African Bank named Bank of the Year for 2012 by The Banker
- African Bank won EMEA Finance's Best Swiss Bond Award
- A range of new innovative products launched
- Strong growth in direct channels
- Call centre expanded to 1 300 agents

Challenges
- Subdued economic outlook
- Slowing consumer demand
- Tough collections environment
- Regulatory uncertainty
- Growing the customer base
- Balancing growth, shareholder returns and capital requirements
- Retail merchandise sales growth in current economic environment

OVERVIEW

Trading environment
The first half of 2013 proved to be a challenging period. The significant increase in unsecured lending by all players in the market during 2012 introduced 
unacceptable risk into certain segments of our customer base. ABIL's response was to forego volume growth for risk reduction through lower offer rates, smaller 
loan sizes and increased pricing. These measures have substantially curbed credit offers. The demand for credit also reduced as consumers faced high levels of 
household debt and our offers became less competitive, which generally led to lower growth in disbursements. It also helped safeguard ABIL to a large extent 
against further increases in risk.

The negative impact of slowing credit extension is twofold: Book and revenue growth are affected and credit quality ratios deteriorate as the bad debts from previous 
high growth periods flow through. These trends were particularly evident in the current six months, where bad debts increased as a result of collections having come 
under pressure. The knock-on effect from the recent strike activity led to increased debt servicing burdens. The group is actively addressing these trends by bolstering 
the call centre capacity, implementing additional risk reduction measures, increasing provisions for credit losses and by placing increased emphasis on 
assisting customers through rehabilitation efforts. 

Trading conditions in the furniture industry deteriorated rapidly during the period, as customers' lower disposable incomes and higher indebtedness affected both 
their willingness and ability to spend. Deflationary trends in durable goods continued. Measures implemented by ABIL to reduce high risk credit extension via smaller 
parcels of credit adversely impacted the sale of merchandise. Efforts to further reduce costs and maintain firm margins could not fully counter the decline in 
merchandise sales. The business is currently carrying duplicate costs from the recent rollout of the centralised distribution network which further affected results.
 
Financial performance
Commenting on results ABIL said "The drop in earnings was impacted by a combination of a sharper than expected decline in the macro-economic landscape and some once 
off business related factors. We made the prudent decision in March to write off an additional amount of NPLs to improve the quality of our loan book in light of 
the economic outlook.  The in duplum (once off adjustment in respect of capping of arrears interest and fees), increased bad debt charge and retrospective insurance 
claims, were also one off charges, all of which should normalise from now on, albeit at slightly higher levels."

Headline earnings and headline earnings per share declined by 26% to R1 015 million (H1 2012: R1 370 million) and 125,7 cents (H1 2012: 170,4 cents), respectively. 
The group generated a return on total equity of 13,9% for the six months to 31 March 2013 (H1 2012: 20,3%) and a return on average tangible equity of 23,9% 
(H1 2012: 37,5%). ABIL generated an economic loss, after charging for its cost of equity, of R47 million (H1 2012: economic profit of R390 million). An interim 
ordinary dividend per share of 25 cents (H1 2012: 85 cents) was declared.

Headline earnings benefited from the replacement of secondary tax on companies (STC) with a dividend withholding tax by an amount of R79 million. Excluding this 
benefit, headline earnings would have been 30% lower than the comparable period in 2012.

Headline earnings in the Banking unit declined by 20% to R1 001 million (H1 2012: R1 259 million) and economic profit by 72% to R129 million. The unit produced a 
return on equity of 16,6% (H1 2012: 22,9%) and a return on average tangible equity of 24,9%. The Banking unit continued to show positive advances growth and maintained
good control over operating and funding costs. These improvements were, however, negated by:

- A lower yield, partially as a result of higher suspension of income on increased non-performing loans and more so due to a once-off charge as a result of the final 
  implementation of in duplum for the credit card portfolio. The once-off charge impacted the yield by approximately 50 basis points. Excluding the once-off in duplum 
  adjustment, the yield was marginally lower than the second half of 2012. The group has also increased pricing over the past year to ameliorate the increased risk and 
  the current incoming gross yield prior to suspension is higher than in the comparative period. 
- An elevated charge for bad and doubtful advances resulting from higher NPL formation in the first few months of the year, exacerbated by ABIL's decision to write off
  an additional R445 million of non-performing loans in March. This increased write-off coupled with the group's communicated intent to reduce the value of the previously 
  written off book had the effect of reducing coverage, and accordingly NPL coverage was increased to recent norms post the write-off. These actions were taken to improve 
  the quality of the loan book over the long term but in the short term, it affected the income statement particularly negatively.
- Insurance claims and related provisions increased as a result of the group broadening the range of insured events. The charge is retrospective in nature, as ABIL 
  has previously applied a narrower definition of loss of income through retrenchment.
 
Headline earnings in the Retail unit decreased to R18 million (H1 2012: R191 million), due to the 11% decline in sales and the high fixed cost nature of the furniture 
retail business. Good cost management and slightly firmer margins could not sufficiently counteract the merchandise sales decline. EHL is also currently carrying 
duplicate costs from the recent rollout of the centralised distribution network which contributed to the negative result and which is expected to disappear towards 
the end of 2014 as leases expire and old warehouses are shut down. The Retail unit generated a return on sales of 0,8%, a return on equity of 1,3% and a return on 
average tangible equity of 5,0%. It generated an economic loss of R189 million. EBITDA was R138 million for the period, relative to R350 million for the corresponding 
period. 

Probe by the National Credit Regulator
The National Credit Regulator (NCR) announced in October 2012 that it was investigating a number of lenders including African Bank for possible reckless lending. 
The investigation into African Bank focused on fraudulent activity at one of its branches. The NCR advised African Bank in February 2013 that it has referred the 
matter to the National Consumer Tribunal (NCT) and has proposed that the NCT impose a fine of R300 million on the Bank.
 
African Bank has handed the matter to its attorneys, contests the allegations and believes, based on legal counsel, that the fine is unwarranted given the specific 
facts and circumstances. Both parties have submitted their documents to the NCT for review and it is expected that the NCT will review the matter within the next few 
months. Accordingly, no provision has been made in these results for any potential fine.

DIRECTORATE

Leeanne Goliath was appointed company secretary to African Bank Investments Limited on 18 October 2012.
There have been no changes to the ABIL board over the reporting period.

LOOKING AHEAD

The lower sales and collections for the first half of the 2013 financial year has put pressure on ABIL's full year results. The group has therefore implemented further
revenue enhancing initiatives, whilst reducing risk and has renewed the impetus to tightly manage collections, operating costs and capital expenditure. Trading 
conditions are expected to remain difficult for the remainder of the year and possibly deteriorate slightly in the retail environment. The risk reduction measures of 
lower offer rates, smaller loan sizes and increased pricing will continue to impact on sales but will strengthen the quality of the loan book and sustain profitable 
growth beyond 2013.

ABIL's advances growth will continue to exceed sales growth as older short term loans pay off and are replaced by longer term loans. New products and changes in the 
group's customer offering also bode well for business over the medium term.

The bad debt charge is expected to remain elevated for the rest of the year, but the risk reduction measures implemented should benefit the charge from 2014. At the 
same time, the large write-offs have improved the quality of the remaining NPL portfolio. 

The higher incoming yield, the fact that the effect of income suspension on the NPL portfolio will reduce and that the retrospective credit card in duplum charge will 
not repeat, should support the yield going forward. 

Operating and funding cost growth remains well contained and approximately R100 million of duplicate costs is expected to come out of the Retail unit during 2014.
 
The slowdown in furniture sales growth is expected to endure due to continued pressure on the consumer as a result of rising inflation, lower consumer confidence, 
increasing debt burdens and continuing tightening of credit. The challenge lies in assessing how long the slowdown will last and implementing appropriate strategies 
given this assessment. The Retail unit will continue to focus on margin management, further cost reduction initiatives to provide maximum operational leverage and 
exploring opportunities for profitable growth, while also paying close attention to stock levels, collections, the credit proposition, marketing and effective 
operational execution.

On ELH results the group said, "We witnessed a further decline in customers in our furniture outlets, which resulted in us lowering our expectations on customers' 
ability to spend even further towards the end of this reporting period. Current duplicate costs further exacerbated the retailers' drop in earnings.   
We have reduced our credit offering and do not foresee an improvement in our customers' disposable incomes and ability to spend, in the near future. 
While we are doing everything operationally to reduce the impact of lower sales, we anticipate a challenging year ahead for this business."

ABIL remains profitable and well-funded, with a solid capital position. The existing loan book continues to generate strong cash flows and our conservative funding 
approach continues to enable the Bank to withstand volatile economic cycles.

While the outlook for the short term is for continuing challenging conditions, we have spent the past few years building a group that is financially and operationally 
robust and resilient and can withstand downturns in the economy and in credit markets. ABIL remains confident of its ability to entrench its position as the market 
leader in a larger, more competitive and fast changing unsecured credit market, despite the challenging outlook.
                           
The information in this announcement has not been reviewed nor audited and reported on by ABIL's external auditors.

On behalf of the board

Mutle Mogase               Leon Kirkinis
Chairman                   Chief executive officer
20 May 2013

DIVIDEND DECLARATION

Ordinary dividend declaration and capitalisation share alternative
Ordinary shareholders are advised that the board of directors has declared an interim gross cash dividend of 25 cents per ordinary share (21,25000 cents net of 
dividend withholding tax) for the six months to 31 March 2013 (the cash dividend). No secondary tax on companies (STC) credits were applied to this dividend 
declaration. The dividend has been declared as a cash distribution but with an opportunity for ordinary shareholders to elect capitalisation shares to provide 
flexibility for shareholders wishing to increase their holding in the company given recent changes to dividend tax in South Africa.

Ordinary shareholders will be entitled to elect to receive ordinary shares of 2,5 cents each in the company as capitalisation shares in lieu of the cash dividend 
(the capitalisation issue), to be determined by the ratio that 25 cents bears to the volume weighted average price of the company's ordinary shares on the exchange 
operated by the JSE Limited (JSE) during the nine-day trading period ending 30 May 2013. 

The cash dividend will be paid out of the company's distributable profits while the issue price of the capitalisation shares (which will equal the volume weighted 
average price of ABIL's ordinary shares traded on the JSE for the 9 day period ending on Thursday, 30 May 2013) will be settled by the company utilising a portion 
of the company's share premium reserves of R9 324 million but the share premium will only be utilised to the extent of the par value of the capitalisation shares 
(being 2,5 cents each) and the balance of the issue price shall be paid for through the capitalisation of distributable profits. The capitalisation shares will, 
upon their issue, rank pari passu in all respects with the other ordinary shares then in issue.

Details of the ratio will be released on the Securities Exchange News Services (SENS) of the JSE by no later than 11:00 on Friday, 31 May 2013 and published in the 
South African press the following business day. Trading in the Strate Limited environment does not permit fractions and fractional entitlements. Accordingly, where 
an ordinary shareholder's entitlement to new ordinary shares calculated in accordance with the above formulae gives rise to a fraction of a new ordinary share, such 
fraction of a new ordinary share will be rounded up to the nearest whole number where the fraction is greater than or equal to 0,5 and rounded down to the nearest 
whole number where the fraction is less than 0,5.

A circular relating to the cash dividend and the alternative capitalisation issue will be posted to ordinary shareholders on or about Friday, 24 May 2013.

Timetable for ordinary shares

Share code                                                            ABL
ISIN                                                                  ZAE000030060
Company registration number                                           1946/021193/06 
Company tax reference number                                          9850164717                 
Dividend number                                                       25
Gross cash dividend per share                                         25 cents
Net dividend amount represented as cents per share                    21,25000 cents
Issued shares as at declaration date                                  810 232 118
Declaration date                                                      Monday, 20 May 2013
Circular and form of election posted to shareholders on               Friday, 24 May 2013
Finalisation announcement released on SENS                            Friday, 31 May 2013
Finalisation announcement published in the press                      Monday 3 June 2013
Last date to trade to be eligible for the cash 
dividend/capitalisation shares                                        Friday, 7 June 2013
Shares commence trading ex-cash dividend/capitalisation shares        Monday, 10 June 2013
Listing of maximum possible number of ordinary shares from            Monday, 10 June 2013
Last date to elect to receive the capitalisation issue instead 
of the cash dividend. Forms of election to reach the transfer 
secretaries by 12:00 on                                               Friday, 14 June 2013
Record date in respect of cash dividend/capitalisation shares         Friday, 14 June 2013
Dividend payment date                                                 Tuesday, 18 June 2013
Results of capitalisation issue released on SENS                      Tuesday, 18 June 2013
Share listing adjusted                                                Wednesday, 19 June 2013

Share certificates may not be dematerialised or rematerialised between Monday, 10 June 2013 and Friday, 14 June 2013, both dates inclusive.

Tax implications
The cash dividend and the capitalisation issues are likely to have tax implications for both resident and non-resident shareholders. Shareholders are therefore 
encouraged to consult their professional tax advisers should they be in any doubt as to the appropriate action to take.

In terms of the Income Tax Act, the cash dividend will, unless exempt, be subject to dividend withholding tax (DWT) that was introduced with effect from 1 April 2012. 
South African resident shareholders that are liable for DWT, will be subject to DWT at a rate of 15% of the cash dividend and this amount will be withheld from the 
cash dividend. Non-resident shareholders may be subject to DWT at a rate of less than 15% depending on their country of residence and the applicability of any double 
tax agreement (DTA) between South Africa and their country of residence.

The capitalisation issue is not subject to DWT in terms of the Income Tax Act, but the subsequent disposal of shares obtained as a result of the capitalisation issue 
is likely to have income tax or capital gains tax (CGT) implications. Where any future disposals of shares obtained as a result of the capitalisation issue fall within the
CGT regime, the base cost of such shares will be deemed to be zero in terms of the Income Tax Act (or the value at which such shares will be included in the determination 
of the weighted average base cost method will be zero).

Preference dividend declaration
Preference shareholders are advised that the board of directors has declared an interim gross cash dividend of 322 cents per ordinary share (273,70000 cents net of DWT).
The dividends have been declared from income reserves.

A dividend withholding tax of 15% will be applicable to all shareholders who are not exempt from the tax, or liable to lower tax rates due to any DTA.

Timetable for preference shares

Share code                                                             ABLP
ISIN                                                                   ZAE000065215
Company registration number                                            1946/021193/06
Company tax reference number                                           9850164717
Dividend number                                                        17
Gross cash dividend per share                                          322 cents
Net dividend amount represented as cents per share                     273,70000 cents
Issued shares as at declaration date                                   13 523 029
Declaration date                                                       Monday, 20 May 2013
Last date to trade cum-dividend                                        Friday, 7 June 2013
Shares commence trading ex-dividend                                    Monday, 10 June 2013
Record date                                                            Friday, 14 June 2013
Dividend payment date                                                  Tuesday, 18 June 2013

Share certificates may not be dematerialised or rematerialised between Monday, 10 June 2013 and Friday, 14 June 2013, both dates inclusive.

OTHER DISCLOSURES

Basis of preparation
The preparation of these group condensed interim financial statements was supervised by the chief financial officer, Nithia Nalliah CA(SA).

These condensed group interim financial statements have been prepared in accordance with the framework concepts and the measurement and recognition requirements of 
the International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board, Interpretations issued by the International Financial 
Reporting Interpretations Committee (IFRIC) of the IASB, IAS 34  Interim Financial Reporting, the AC 500 Standards as issued by the Accounting Practices Board, the 
requirements of the Companies Act 71 of 2008 as well as the Listings Requirements of the JSE Limited. 

The group has adopted the following standards and interpretations during the financial year, which did not have a material impact on the reported results:
- IAS 1  Presentation of Items of Other Comprehensive Income; and
- IAS 12  Measurement of Deferred Tax Asset.

The group has a contingent liability in respect of the proposed fine by the National Credit Regulator. There is no provision as it is not practical to estimate the 
outcome of the matter.

The accounting policies and their application are consistent with those used for the group's 2012 annual financial statements.

CONDENSED SEGMENTAL INCOME STATEMENT 
for the six months ended 31 March 2013

                                                    31 March 2013 (Unaudited)                            31 March 2012 (Unaudited)                 30 September 2012 (Audited)
                                                                     
                                                                                  Consoli-                                      Consoli-                                      Consoli-
R million                                           ABIL  Banking     Retail        dation        ABIL  Banking     Retail        dation      ABIL   Banking     Retail         dation
                                      % change     Group     unit       unit   adjustments       Group     unit       unit   adjustments     Group      unit       unit    adjustments 


Gross margin on retail business            (11)    1 042              1 042                    1 172              1 172                  2 134              2 134                
Interest income on advances                 25     5 680    5 630         50                    4 557    4 509         48                  9 919    9 823         96                
Assurance income                            26     2 491    2 274        217                    1 976    1 749        227                  3 828    3 401        427                
Non-interest income                          1     1 632    1 475        235           (78)      1 616    1 465        259          (108)    3 291    3 018        479            (206)
Income from operations                      16    10 845    9 379      1 544           (78)      9 321    7 723      1 706          (108)   19 172   16 242      3 136            (206)
Credit impairment charge                    45    (3 463)  (3 441)       (22)                  (2 385)  (2 375)       (10)                (5 197)  (5 170)       (27)              
Claims paid                              > 100      (801)    (801)                              (395)    (394)        (1)                  (912)    (918)         6                
Risk-adjusted income from operations         1     6 581    5 137      1 522           (78)      6 541    4 954      1 695          (108)   13 063   10 154      3 115            (206)
Product insurance claims                   (24)      (32)               (32)                     (42)               (42)                   (60)               (60)               
Other interest and investment income        23       177      180         36           (39)        144      141         37           (34)      219      324         74            (179)
Interest expense                            25    (2 199)  (2 181)       (52)           34      (1 762)  (1 753)       (43)           34    (3 680)  (3 771)       (84)            176 
Operating costs                              7    (2 982)  (1 606)    (1 457)           81      (2 795)  (1 516)    (1 387)          108    (5 467)  (2 957)    (2 716)            206 
Indirect taxation: VAT                      60       (69)     (66)                     (3)        (43)     (43)                             (72)     (72)                         
Profit from operations                     (28)    1 476    1 464         17            (5)      2 043    1 783        260                  4 003    3 678        329              (4)
Capital items                             (100)                                                 (6)                (6)                    (6)                (6)               
Profit before taxation                     (28)    1 476    1 464         17            (5)      2 037    1 783        254                  3 997    3 678        323              (4)
Direct taxation: STC                      (100)                                                (79)       1                     (80)      (82)      (2)                      (80)
Direct taxation: Normal                    (26)     (419)    (421)         1             1        (569)    (502)       (67)                (1 112)  (1 038)       (75)              1 
Profit for the period                      (24)    1 057    1 043         18            (4)      1 389    1 282        187           (80)    2 803    2 638         248            (83)
	 												
Reconciliation of headline earnings	
 												
Profit for the period (basic earnings)     (24)    1 057    1 043         18            (4)      1 389    1 282        187           (80)    2 803    2 638         248            (83)
Preference shareholders                     91       (44)     (44)                               (23)     (23)                             (61)     (61)                         
Basic earnings attributable to 
ordinary shareholders                      (26)    1 013      999         18            (4)      1 366    1 259        187           (80)    2 742    2 577         248            (83)
Adjustment for non-headline items:         (50)        2        2                                  4                  4                     12        3           9               
Gross                                                  2        2                                  6                  6                     17        4          13               
Tax thereon                                                                                     (2)                (2)                    (5)      (1)         (4)              
Headline earnings                          (26)    1 015     1 001        18            (4)      1 370    1 259        191           (80)    2 754    2 580         257            (83)

Intersegment revenues included in income from operations are for the Retail unit only and amounted to R78 million (H1 2012: R108 million).

CONDENSED SEGMENTAL STATEMENT OF FINANCIAL POSITION
as at 31 March 2013

                                                    31 March 2013 (Unaudited)                           31 March 2012 (Unaudited)                 30 September 2012 (Audited)
                                                                     
                                                                                  Consoli-                                      Consoli-                                      Consoli-
R million                                           ABIL  Banking     Retail        dation        ABIL  Banking     Retail        dation      ABIL   Banking     Retail         dation
                                      % change     Group     unit       unit   adjustments       Group     unit       unit   adjustments     Group      unit       unit    adjustments 
Assets													
Short term deposits and cash                (1)    4 672    5 011         92          (431)      4 733    4 886         78          (231)    3 070    3 394         92            (416)
Statutory assets  bank and 
insurance                                   43     5 133    4 292        642           199       3 586    3 045        541                  4 322    3 533        605             184 
Inventories                                  3       872                872                      847                847             -       871                871                
Other assets                             > 100     2 369    2 216        211           (58)      1 006      685        391           (70)    1 310      971        411             (72)
Other assets  intragroup                             -      770        199          (969)                324        156          (480)              464        184            (648)
Taxation                                    27        33                 33             -          26                 26                     27                 27                
Net advances                                24    50 842   50 973        396          (527)     41 014   41 085        348          (419)   46 013   46 130        363            (480)
Deferred tax asset                          37       732      192        537             3         534      175        358             1       762      323        437               2 
Property and equipment                      34     1 286      605        692           (11)        962      575        390            (3)    1 152      627        531              (6)
Intangible assets                          (10)      647                647                      718                718                    683                683                
Goodwill                                          5 472    4 000        755           717       5 472    4 000        755           717     5 472    4 000        755             717 
Total assets                                22    72 058   68 059      5 076        (1 077)     58 898   54 775      4 608          (485)   63 682   59 442      4 959            (719)
Liabilities and equity 													
Short term funding                          27     5 577    5 109        468                    4 393     3 955       438                  4 587    4 111        476                
Short term funding  intragroup                             199        691          (890)                 156       319          (475)              184        459            (643)
Other liabilities                           14     2 100    1 194      1 405          (499)      1 841       724     1 541          (424)    2 201    1 003      1 689            (491)
Other liabilities  intragroup                               58        107          (165)                  70                    (70)               66                       (66)
Taxation                                   (75)       26       22          4             -         105        64        41                     94       79         15                
Deferred tax liability                      (6)      206                206                      219                219                    216                216                
Bonds and other long term funding           28    43 742   43 654         88                   34 200    34 173        27                 37 320   37 300         20                
Subordinated bonds                          40     4 355    4 355                              3 105     3 105                           3 831    3 831                          
Total liabilities                           28    56 006   54 591      2 969        (1 554)     43 863    42 247     2 585          (969)   48 249   46 574      2 875          (1 200)
Ordinary shareholders' equity                7    14 922   12 338      2 107           477      13 905    11 398     2 023           484    14 303   11 738      2 084             481 
Preference shareholders' equity	             -     1 130    1 130                              1 130     1 130                           1 130    1 130                          
Total equity (capital and reserves)          7    16 052   13 468      2 107           477      15 035    12 528     2 023           484    15 433   12 868      2 084             481 
Total liabilities and equity                22    72 058   68 059      5 076        (1 077)     58 898    54 775     4 608          (485)   63 682   59 442      4 959            (719)

CONDENSED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 31 March 2013
                                                                         Unaudited            Unaudited           Audited
                                                                       6 months to          6 months to      12 months to
R million                                                % change      31 Mar 2013          31 Mar 2012       30 Sep 2012  

Profit for the period                                         (24)           1 057                1 389             2 803 
Other comprehensive income comprising of items that are 
or may subsequently be reclassified to profit or loss	 			
Exchange differences on translating foreign operations     > (100)               5                   (4)               (4)
Movement in cash flow hedge reserve                         > 100              324                   44              (200)
IFRS 2 reserve transactions (employee incentives)          > (100)             (31)                  46                (7)
Other comprehensive income for the period, net of tax       > 100              298                   86              (211)
Total comprehensive income for the period                      (8)           1 355                1 475             2 592

CONDENSED STATEMENT OF CASH FLOWS
for the six months ended 31 March 2013

                                                                         Unaudited            Unaudited           Audited
                                                                       6 months to          6 months to      12 months to
R million                                                              31 Mar 2013          31 Mar 2012       30 Sep 2012  

Cash generated from operations                                               5 703                4 860             9 558 
Cash received from lending, insurance activities, sale
of merchandise and cash reserves                                            12 253               10 825            21 917 
Recoveries on advances previously written off                                  110                   98               300 
Cash paid to funders, staff, suppliers and insurance beneficiaries          (6 660)              (6 063)          (12 659)
Increase in gross advances                                                  (8 352)              (8 352)          (16 274)
Increase in working capital                                                 (1 421)                (321)             (344)
(Increase)/decrease in inventories                                              (1)                  38                14 
Increase in other assets                                                    (1 211)                (115)             (438)
(Decrease)/increase in other liabilities                                      (209)                (244)               80 
Indirect and direct taxation paid                                             (589)                (808)           (1 486)
Cash inflow from equity accounted incentive transactions                                            11                14 
Cash outflow from operating activities                                      (4 659)              (4 610)           (8 532)
Cash outflow from investing activities                                        (687)                (618)           (1 304)
Acquisition of property and equipment (to maintain operations)                (185)                (227)             (568)
Disposal of property and equipment                                              57                   13                31 
Other investing activities                                                    (559)                (404)             (767)
Cash inflow from financing activities                                        7 200                7 169            10 487 
Cash inflow from funding activities                                          7 936                7 585            11 625 
Issue of preference shares                                                                         411               411 
Preference shareholders' payments and transactions                             (44)                 (23)              (61)
Ordinary shareholders' payments and transactions                              (692)                (804)           (1 488)
			
Increase in cash and cash equivalents                                        1 854                1 941               651 
Cash and cash equivalents at the beginning of the period                     4 260                3 609             3 609 
Cash and cash equivalents at the end of the period                           6 114                5 550             4 260 
Made up as follows:			
Short term deposits and cash                                                 4 672                4 733             3 070 
Statutory cash reserves  insurance                                          1 442                  817             1 190 
                                                                             6 114                5 550             4 260 
			
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 March 2013

                                                                                                Ordinary shares	
                                                                          Share                      Share-                 Ordinary        Preference
                                                                        capital      Distri-          based                   share-             share
                                                                            and      butable        payment                 holders'       capital and
R million                                                               premium     reserves        reserve       Other       equity           premium         Total

Balance at 30 September 2011 (audited)                                    9 151        4 263             81        (249)      13 246               719        13 965
Dividends paid                                                                         (804)                                 (804)              (23)         (827)
Issue of preference shares                                                                                                                    411           411 
Profit on group employees acquiring ABIL Share Trust shares 
less dividends received                                                                   3                                     3                              3 
Shares purchased into the ABIL Employee Share Trust less 
shares issued to employees (cost)                                                                                  8            8                              8 
Transfer to insurance 
contingency reserve                                                                      (4)                        4                                           
Total comprehensive income 
for the period                                                                        1 366             46          40        1 452                23         1 475 
Balance at 31 March 2012 (unaudited)                                      9 151        4 824            127        (197)      13 905             1 130        15 035 
Dividends paid                                                                         (684)                                 (684)              (38)         (722)
Shares purchased into the ABIL Employee Share Trust less 
shares issued to employees (cost)                                                                                  3            3                              3 
Transfer from share-based 
payment reserve                                                                          77            (77)                                                     
Total comprehensive income 
for the period                                                                        1 376            (53)       (244)       1 079                38         1 117 
Balance at 30 September 2012 (audited)                                    9 151        5 593             (3)       (438)      14 303             1 130        15 433 
Dividends paid                                                                         (692)                                 (692)              (44)         (736)
Shares issued in terms of the scrip distribution announced on 
30 November 2012                                                            193         (193)                                                                   
Total comprehensive income 
for the period                                                                        1 013            (31)        329         1 311               44         1 355 
Balance at 31 March 2013 (unaudited)                                      9 344        5 721            (34)       (109)       14 922            1 130        16 052

NOTES
1. Number of ordinary shares at 31 March 2013
                                                                          Total      Weighted
Number of shares in issue at the beginning of the year              804 175 200   804 175 200
Shares issued during the period                                       6 056 918     3 461 096
                                                                    810 232 118   807 636 296
CORPORATE INFORMATION

Board of directors
Non-executive: MC Mogase (Chairman), N Adams, Advocate MF Gumbi, JDMG Koolen#, 
NB Langa-Royds, S Sithole*, RJ Symmonds
Executive: L Kirkinis (CEO), A Fourie, N Nalliah, TM Sokutu

* Zimbabwean # Dutch

Company secretary: L Goliath

African Bank Investments Limited	
(Incorporated in the Republic of South Africa)	
(Registered bank controlling company)	
(Registration number 1946/021193/06)	
(Ordinary share code: ABL) (ISIN: ZAE000030060)	
(Preference share code: ABLP) (ISIN: ZAE000065215)

Registered office
59 16th Road
Midrand, South Africa, 1685
Private Bag X170, Midrand,
South Africa,
1685

Investor relations and shareholder details 
            Lydia du Plessis    Chiquita Schram
Telephone:   +27 11 564 6991    +27 11 256 9523

Email: investor.relations@africanbank.co.za

Sponsor
Rand Merchant Bank (a division of FirstRand Bank Limited)
1 Merchant Place, cnr Fredman Drive and Rivonia Road, Sandton, 2196

Share transfer secretaries
Link Market Services South Africa (Pty) Limited
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein
PO Box 4844, Johannesburg, 2000
Telephone +27 11 713 0800
Telefax: +27 86 674 4381

www.abil.co.za                                                                                                                                                                         
							


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