African Bank making strides towards JSE listing

African Bank has made significant strides in the first half of its 2025 financial year, with increased profit and a stronger loan book with fewer expected credit losses.

African Bank released its results for the six months through March 2025 on Monday, 26 May 2025.

These results showed an overall improved performance from the group, with a total comprehensive profit of R202 million for the period, up from R176 million in H1 2024.

The company’s total income before investment in insurance stood at R3.47 billion, up around 5% from the prior year.

This total consisted mainly of R2.56 billion in net interest income, which declined slightly compared to the prior year’s R2.65 billion. 

Non-interest income contributed R844 million to total income, a significant increase from R604 million in H1 2024.

African Bank’s net insurance result for this period was R308 million, up around 7.7% from the prior period’s R286 million.

The company’s costs also rose slightly in the period, growing from R2.02 billion to R2.34 billion.

However, positively, African Bank’s credit impairments declined from R1.36 billion to R1.22 billion in the six-month period.

The bank’s balance sheet was strong in this period, with assets up around 7.6% and net advances growing by 19.6% to R39.15 billion.

In addition, the company’s expected credit losses improved slightly from R10.15 billion to R9.97 billion.

African Bank reported a CET1 ratio of 25.8%, which is well above its regulatory minimum and a total Capital Adequacy Ratio of 29.6%, putting the bank in a strong position.

The bank reported a decline in its cash reserves, with cash and cash equivalents decreasing from R5.98 billion to R3.67 billion.

Notably, the bank also reported that the Prudential Authority (PA) is looking into a loan the African Bank Group made to African Insurance Group (AIG), one of its subsidiaries.

The bank said AIG required this loan to manage its liquidity and pay dividends to its holding company. 

“The PA raised concerns regarding what the PA understood to be issues of compliance with the Companies Act, the Banks Act, as well as the resulting regulatory treatment for the purposes of calculating the regulatory capital ratios,” the bank explained.

It insisted that this loan was extended in the ordinary course of business as a financial services provider and that the group was in full compliance with applicable laws, regulations, and internal governance requirements.

However, as of 26 May 2025, the PA has not accepted the group’s accounting and capital treatment of these transactions.

“Discussions with the Prudential Authority regarding this matter remain ongoing,” African Bank said.

Positively, African Bank also reported strong client growth in this period, with 2.4 million customers now using its Personal Banking product suite.

Going forward, the bank will look to expand its secured lending offerings, launch a digital SMME lending platform, and invest further in digital infrastructure, compliance, and cybersecurity.

“This journey is about building a bank that belongs to South Africans, one that serves with integrity and purpose,” CEO Kennedy Bungane said.

“As we prepare for a future listing, we remain guided by our founders’ bold vision and the needs of the communities we serve.”