African Bank plans launch of full-suite offering in April

A reinvigorated African Bank is due to launch its full-service transactional bank offering in the next few months as the level of competition in the country’s banking industry intensifies with the arrival of new competitors.

CEO Basani Maluleke said the bank planned to launch the new offering called “MyWORLD” by the middle of April. 

African Bank has come a long way since it was placed into curatorship by the Reserve Bank in 2014. Under previous CEO Leon Kirkinis the bank relied almost entirely on wholesale funding to finance its lending activities and offered no transactional banking capabilities such as cheque and debit accounts.

Serious mistakes in extending credit left led to it being placed in curatorship by the Reserve Bank and later being recapitalised in conjunction with a consortium of large banks, and the Public Investment Corporation, to the tune of R10bn.

One of the bank’s biggest priorities now is to attract retail depositors.

“We intend to substitute the large amount of wholesale funding with more retail funding, which costs us, on average, 200 basis points less than wholesale rates,” says Maluleke.

The bank already has savings and investment accounts in place that offer rates as high as 10.75% a year, one of the highest in the market.

The MyWORLD concept will see African Bank offering a full-service transactional banking capability through its physical branch network and digital channels, the internet, and using the soon-to-be-released smartphone apps.

George Roussos, group executive of digital and transactional banking at African Bank, thinks the bank has three key advantages that will support the launch of its MyWORLD product.

“Firstly, the 1.5-million customers we have served are familiar and remain loyal to our brand. Secondly, we have a significant branch infrastructure which is already in place and thirdly, we have transformed the call centre that was previously only largely focused on collections to a more digitised structure with improved capabilities to generate sales and better assist clients with queries.”

Roussos said the bank’s low cost-to-income ratio of 33% provided the opportunity to launch its transactional product at a competitive fee structure given the enhanced functionality it will offer.

thompsonw@businesslive.co.za