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Release of Audited Financial Results and Related Group Information for the Year Ended 30 September 2019
AFRICAN BANK LIMITED
(Incorporated in the Republic of South Africa)
(Registered Bank)
(Registration No. 2014/176899/06)
Company code: ABKI
(“the Bank” or “African Bank”)
RELEASE OF THE AUDITED FINANCIAL RESULTS FOR AFRICAN BANK LIMITED AND RELATED GROUP
INFORMATION FOR THE YEAR ENDED 30 SEPTEMBER 2019
African Bank is pleased to announce the release of the audited annual financial statements for the year
ended 30 September 2019 (“results”).
These results represent the fourth set of annual financial results reported by the Bank and its holding
company African Bank Holdings Limited (“ABH” or “ABH Group”), which also released its audited
consolidated annual financial statements for the year ended 30 September 2019 (“ABH consolidated
results”) today.
In the year under review, African Bank has continued to be a responsible provider of unsecured credit to
South African consumers. Credit risk continues to be well within the Bank’s risk appetite, while new credit
disbursements have increased against a backdrop of stricter credit underwriting criteria. The Bank has also
continued to invest in new capabilities to diversify its business as well as to take advantage of new
technologies that will enable the Bank to become a formidable competitor in the banking sector. This
investment in new capabilities combined with regulatory changes has resulted in a decline in operating
profit for the Bank.
The ABH Group changed the basis of calculating the fees paid by its cell captive investment in Guardrisk
Life Limited (“cell captive investment”) during the prior year. This resulted in fees earned by the Bank
from the cell captive investment during the current financial year being R183 million (before tax) less than
the previous financial year. This change, which was necessitated by a change in regulation, had a
corresponding negative effect on the Bank’s earnings for the year ended 30 September 2019, but did not
affect the ABH Group earnings, since the insurance operation paid a correspondingly lower fee to the Bank.
The Bank launched its transactional banking proposition, MyWORLD, on 21 May 2019, which signals a new
phase in the Bank’s growth. An increasing number of retail deposit customers continue to show trust in the
Bank, as evidenced by the significant increase in savings and investments deposits. The ABH Group
continues to maintain robust capital levels and surplus liquidity.
Key aspects of the African Bank results, in comparison to the previous audited year’s audited results,
include the following:
• Operating profit before tax: R309 million (2018: R485 million)
• Profit after tax: R217 million (2018: R303 million)
• Net customer advances balances: R19 815 million (2018: R18 178 million)
• Cash deposits, including surplus liquid assets: R5 647 million (2018: R8 246 million)
• Retail customer deposits: R2 391 million (2018: R1 111 million)
• Core Equity Tier 1 capital adequacy ratio: 31.8% (2018: 31.5%)
The audit report on the results was unqualified and there were no restatements to the previously published
2018 results.
ABH Group information
African Bank is a 100% subsidiary of ABH. ABH is an unlisted, registered bank controlling company under
the Banks Act, Act 94 of 1990. The shares in ABH are privately held by the South African Reserve Bank, the
Government Employees Pension Fund, Absa Group Limited, Capitec Bank Limited, FirstRand Bank Limited,
Investec Bank Limited, Nedbank Limited and The Standard Bank of South Africa Limited.
ABH has material insurance operations which are housed in African Insurance Group Limited (“AIG”), a
wholly-owned subsidiary of ABH, which in turn holds a cell captive investment in Guardrisk Life Limited.
The financial performance of the cell captive investment, 100% owned by AIG is not consolidated by ABH
Group in accordance with International Financial Reporting Standards (“IFRS”).The financial performance
of AIG is dealt with in the audited consolidated annual financial statements of ABH Group by means of a
re-measurement of the investment in insurance contracts and the dividend received from such cell captive.
Key aspects of the ABH consolidated results, in comparison previous year’s audited consolidated results,
include the following:
• Profit after tax for the year: R1 154 million (2018: R1 018 million)
• Core Equity Tier 1 capital adequacy ratio: 38.0% (2018: 34.9%)
Profit after tax for the year increased by 13%, which is a pleasing result in light of the difficult economic
back-drop and the investment the Bank has been making in its future capabilities.
Shareholder-backed liquidity support arrangement
The Bank continues to work closely with the ABH Group shareholders in respect of a planned shareholder-
backed liquidity support arrangement.
Results publication material
The following published results in respect of the year ended 30 September 2019 will be accessible on
African Bank’s website at www.africanbank.co.za under the “Investors/Financial Reporting” section as
well as available at the Bank’s registered office, 59-16th Road, Midrand:
1. African Bank Holdings Limited Annual Integrated Report;
2. African Bank Holdings Limited Investor presentation;
3. African Bank Holdings Limited Audited Group Consolidated Annual Financial Statements; and
4. African Bank Limited Audited Annual Financial Statements.
Changes to the Board of Directors
Sybille McCloghrie, who was appointed to the ABH Group and Bank Boards on 28 July 2015, resigned from
these boards with effect from 22 November 2019. She simultaneously resigned as a member of the
Remuneration Committee, Sustainability, Ethics and Transformation Committee and the Technology and
Information sub-Committee.
Frans Truter, who was appointed to the ABH Group and Bank Boards on 7 August 2015, resigned from these
Boards with effect from 30 November 2019. He also simultaneously resigned as a member of the
Remuneration Committee and Directors’ Affairs and Governance Committee, and as Chairman of the Audit
Committee.
The Board Committees have been reconstituted, taking into account the above resignations and further
details appear in the Corporate Governance section of the ABH Group’s Annual Integrated Report which
was published on 26 November 2019 on the Bank’s website at www.africanbank.co.za under the
“Investors/Financial Reporting”.
The Board would like to express their thanks to Ms McCloghrie and Mr Truter for their dedicated service to
the Group during their tenure on the Board.
Conference call details, presentation material and playback facility
Interested parties are invited to register for a conference call during which Basani Maluleke, ABH Group
CEO and Gustav Raubenheimer, ABH Group CFO, will take participants through the results. Details of the
conference call are:
Date Tuesday, 26 November 2019
Time 10h00 SAST/CAT
Web pre-registration Interested parties are requested to pre-register for this
conference call at http://www.diamondpass.net/1659871 and
follow the instructions provided.
A transcript of the conference call will be available on the Bank’s website at www.africanbank.co.za under
“Investors/Financial Reporting”.
26 November 2019
Debt Sponsor
RAND MERCHANT BANK
(A division of FirstRand Bank Limited)
Think Precinct, 1 Merchant Place
Cnr Fredman Drive & Rivonia Road
Sandton 2196, South Africa
P O Box 786273, Sandton, 2146, South Africa
Date: 26-11-2019 09:00:00
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