African Bank’s Customer Base Surges Close to 4 Million

African Bank has experienced a notable surge in its customer base, reaching 3.97 million active users for the fiscal year ending on September 30, 2023. This substantial growth, a considerable leap from the previous financial year’s 1.54 million customers, has been attributed to the successful introduction of the business bank and alliance banking segments.

The Alliance Banking segment, encompassing offerings from Lesaka, Shoprite Checkers, and MTN Momo clients, contributed significantly to the current period’s active customer figures, accounting for 2.05 million customers. Additionally, the Business Bank segment reported 19,487 customers, further diversifying the bank’s clientele.

Consumer banking recorded a noteworthy increase, with 1.89 million active customers, marking a 23% growth from the previous year. The expansion of the MYWORLD product offering played a pivotal role, with the core transactional product boasting a user base exceeding one million.

However, despite the positive momentum in consumer banking, the group acknowledged challenges in the negative economic environment, leading to increased credit impairment charges. The credit loss ratio rose to 8%, compared to 4.9% in 2022, resulting in a credit impairment charge on loans and advances of R3.26 billion, up from R1.43 billion.

African Bank demonstrated resilience and strategic adaptability, returning to profitability in the second half of the year, with a profit after tax of R549 million. This turnaround follows a loss of R44 million in the first half of FY2023, contributing to an overall profit of R505 million for the year, a 31% decrease from FY2022.

The bank’s cash reserves for the period surged to R9.9 billion from R2.8 billion in the prior year, ensuring sufficient liquidity. CEO Kennedy Bungane emphasized the commitment to strategic diversification and growth through the Excelerate25 strategy, praising the audacity that has transformed African Bank into a comprehensive retail and business bank.

The group’s combined consumer and business banking net advances book reached R32 billion, a 41% increase from the previous year. The diversified funding base, totaling R34.6 billion, reflects a robust strategy, with retail and business deposits constituting 87% of the bank’s funding.

Group CFO Anbann Chetti highlighted the significance of the diversified funding base, positioning African Bank for stability and sustainability. The financial results underscore the bank’s resilience, sustainability, and dedication to the enduring vision of its founders.