Ready to put past behind it

Six-month results are good, and new CEO Basani Maluleke is confident the ‘good’ bank is getting the right clients

The new African Bank is barely out of the starting blocks.

It will be up to its new CEO, Basani Maluleke, to build a well-rounded bank and not return to a past that was dominated by microlending and some odd left turns, such as buying furniture chain Ellerines. Maluleke has the right experience to diversify the bank, having worked at market leader Firstrand for 12 years, ending as head of FNB Private Clients.

African Bank’s results for the six months to March are a good start, with operating profit up 42% to R715m.

The bank is granting more credit, but conservatively, as this grew 9% to R4.8bn. Of course, bad debts do not appear overnight, but credit impairments are moving in the right direction, falling from 13.8% to 11.1%.

African Bank still has to contend with expensive funding, implemented as it came out of curatorship. Much of its funding is 400 basis points higher than typical bank finance, but it has bought back R1.9bn of this. Its long-term funding has fallen by a quarter to R13.3bn.

Maluleke is moving the bank slowly from a lopsided wholesale funded bank to bring in retail deposits, which almost doubled to

R680m, though this is still just 3% of the bank’s funding. And these are by no means mass-market clients, as the average deposit is R52,000.

But the bank has had to pay up for clients, offering up to 10.5%/year in intrest for a fiveyear deposit.

Maluleke says the My World transactional facility (which sounds somewhat like an imitation of Capitec’s Global One platform) is still in beta testing, with more than 1,800 staff as the lab rats. Almost half have installed the African Bank app on their devices. Maluleke says the