African Bank’s customer base has grown to 3.97 million active users in the year ended 30 September 2023, with growth supported by the introduction of the business bank and alliance banking segments.
On Tuesday, the unlisted bank reported that its active customer figures jumped from a total of 1.54 million in the prior (2022) financial year.
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Customer figures have been boosted by the Alliance Banking segment – including Lesaka, Shoprite Checkers and MTN Momo client offerings – which in the current period accounted for 2.05 million active customers, while the Business Bank segment accounted for 19 487 customers.
Consumer banking recorded 1.89 million active customers, 23% higher than last year, bolstered by the growth of its MYWORLD product offering. According to African Bank, the group’s core transactional product MYWORLD has seen take-up grow to above a million users.
Despite the growth in consumer banking numbers, the group noted that the negative economic environment squeezed consumer banking clients, leading to a rise in credit impairment charges and the group reporting a credit loss ratio of 8% compared to 4.9% in 2022.
African Bank’s credit impairment charge on loans and advances grew to R3.26 billion, up from R1.43 billion in 2022.
“While we faced some economic pressures this year, our overall performance and growth trajectory position us strongly for the future. We are committed to continuing our path of strategic diversification and growth,” said African Bank CEO Kennedy Bungane.
Back to profit
The bank posted a return to profitability in the second half of the year, with profit after tax coming in at R549 million. The turnaround comes after the group posted a loss of R44 million in the first half of FY2023.
As a result, this year’s interim losses placed the group’s overall profits for the year at R505 million, 31% lower than FY2022.
Cash reserves for the period totalled R9.9 billion, up from R2.8 billion in the prior year, seeing the group reach “sufficient liquidity”.
“This year’s financial results reflect our strong and audacious commitment to strategic growth and diversification driven by our Excelerate25 strategy. Audacity has always been an African Bank trait,” said Bungane.
“It takes audacity to defy the odds, which is what we have achieved with the evolution of African Bank from a mono-line credit lender to a fully-fledged retail and business bank. Our net profit is a testament to our resilience and sustainability, and our dedication to realizing the enduring vision of our founders,” he added.
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The group’s combined consumer and business banking net advances book was reported at R32 billion, 41% higher than last year’s R22.6 billion. This growth was underpinned by strong secured business loans which the bank says makes up over a third of total loans to customers.
African Bank’s diversified funding base totalled R34.6 billion compared to R16.6 billion in the prior year. This comes as its retail and business deposits have grown to account for 87% of the bank’s funding.
“Our diversified funding base is a critical component of our strategy, ensuring a stable and sustainable financial foundation for the bank,” said group CFO Anbann Chetti.
Listen to Jimmy Moyaha speaking to Bungane about African Bank’s recent acquisition spree (or read the transcript):
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