African Bank has a new target

African Bank has seen a jump in profit, with the traditional micro-lender looking to expand its secured lending offerings.

In the six months ended 31 March 2025, African Bank’s net profit after tax rose 15% year-on-year to R202 million.

“They show that our customer-first, innovation-led approach is reaching South Africans where it matters most.”

The Excelerate strategy is the bank’s plan to offer an IPO, as the South African Reserve Bank plans to sell its stake in the bank after acquiring part of the bank a decade ago when it was placed under curatorship.

In recent years, the group has acquired several businesses, including business bank Grindrod, Sasfin’s capital equipment and commercial property businesses and Eskom’s home loan business.

“Our shift toward a broader product mix, particularly into secured lending, is building resilience into our business while unlocking new revenue streams,” said CEO Kennedy Bungane.

The acquisition of Sasfin’s capital equipment finance and commercial property finance division has strengthened the bank’s business and commercial proposition, helping it expand into the SMME sector. 

Financials

Looking at the financials, the group’s advances grew by 20% to R39.1 billion, with a strong 49% surge in Business and Commercial advances.

The bank also reported a 6% increase in its customer base to 6.1 billion, which was driven by growth in both its Personal Banking and Alliance Banking platforms.

The group had a healthy finding base, which grew 8% to R36.3 billion. Customers’ deposits remain the primary funding source, making up 91%.

The group’s non-interest income grew by 39% to R909 million, boosted by an increased uptake of the bank’s digital offerings. This includes the MyWorld transaction account and credit card services.

Credit impairment charges declined by 10%, bringing the total credit loss ratio to 5.3%. This was because of strengthened risk management and a shift towards secured lending.

“Our Excelerate strategy is not only delivering earnings growth but also reshaping the fundamentals of our business,” said CFO Anbann Chetti.

“We are building a scalable, diversified, and future-ready financial institution that creates real value for shareholders, employees and society.”

As per its pre-IPO roadmap, African Bank also launched an employee share ownership scheme, giving employees 10% of the bank’s shares.

Additional broad-based empowerment initiatives, such as a retail BEE offering and a management scheme, are also under development.

Looking ahead, African Bank will expand its secured lending offerings, launch a digital SMME lending platform and invest further in digital infrastructure, compliance and cybersecurity.