TIDM31HB
RNS Number : 6059U
African Bank Ltd
26 November 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,
59-16(th) 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
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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.
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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
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END
FR BABPTMBJTBRL
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