African Bank swung to a profit during the year ended September 2021 from a loss a year earlier and unveiled its 2025 strategy aimed at ensuring the bank remains relevant in competitive environment.
The bank yesterday reported a net profit after tax of R534-million compared to a reported loss of R27-million for the same period last year.
Chairperson Thabo Dloti said the bank’s results, while encouraging, remained significantly lower than the 2019 financial year’s pre-pandemic results of a profit of R1.2-billion.
“This slower return to pre-pandemic profitability levels is mainly due to a slower-than-expected recovery of the South African economy and the conservative, but necessary, stance adopted by the group towards credit advancement,” said Dloti.
On the positive side, Dloti said, the group’s net profit after tax of R382-million in the second half of the 2021 financial year was more than double the R152-million generated in the first half of 2021, reflecting an accelerated economic recovery.
“Prior to the outbreak of the novel coronavirus pandemic in South Africa, and given an already weakened macro-economic environment, the group took proactive steps to tighten various credit-granting criteria,” Dloti said.
He added that further tightening measures occurred in 2020, given the impacts of the Covid-19 extended lockdown on the financial well-being of consumers.
“As a key outcome, the level of disbursements granted to customers remained low during the current reporting period, resulting in the year-end gross advances balance declining by 6 percent year-on-year,” he said.