African Bank eyes low costs

African Bank says it is going to offer the lowest-cost transactional bank account in SA and anticipates that it will dislodge Capitec’s position as the cheapest bank, while also promising one of the best digital offerings in the market.

“We have done an analysis of the different banks’ fee structures and we are confident that we have the best value proposition,” said African Bank group chief executive Basani Maluleke during the presentation of the bank’s financial results for the year ended in September.

The bank, which relaunched two-and-a-half years ago following the 2014 collapse, is set to launch a transactional banking product in the first half of 2019. The transactional account, together with the African Bank app, are already in pilot phase, with about 3,000 of the bank’s employees now using it.

With three new banks entering the transactional banking space in 2019 – Discovery’s bank, TymeBank and the PostBank – African Bank is entering a tightly contested space.

“We are very cognisant of the fact that the other banks are coming on stream and we’ve done an analysis of where we think those banks are going to play,” said Maluleke.

She said African Bank’s transactional account will be digitalbased and can be opened and managed fully online.

While African Bank is known for unsecured lending, the “good bank” that came out of the 2016 relaunch wants to make transactional banking a big part of its operations.

African Bank’s customer base decreased to 1.05m by the end of September from 1.25m in 2016. The bank has a target to increase its customer base to 2.5m by 2021.

We have done an analysis of the different banks’ fee structures and we are confident that we have the best value plans