African Bank posts loss after R614m Covid-19 profit hit
The group has made provisions for higher credit impairments as well as for higher future insurance claims
African Bank Holdings, the entity that arose from one of SA’s biggest banking collapses, slipped into a loss in its half year to end-March, after making adjustments for Covid-19 that hit group after-tax profit by R614m.
The group's subsidiary, African Bank, reported a net loss after tax of R311m, from profit of R69m previously, as it braces for the deteriorating creditworthiness of its customer base as a result of Covid-19
The group is also preparing for future insurance claims.
The group has made a R550m provision for higher credit impairments, while its insurance entity has also made a provision of R303m. These adjustments negatively affected after tax profits by R614m.
Excluding this adjustment, the bank would have recorded a profit after tax of R85m.
Savings and investments deposits grew 158% year on year to R3.8bn.
African Bank was formed in 2016 with a R10bn injection from the Reserve Bank, the Public Investment Corporation, and a number of other SA banks, which followed African Bank Investments’ collapse under a mountain of bad debt in 2014.
Correction: June 24 2020
An earlier version of this article said the group had reported a R311m loss, when this was a loss by African Bank, the wholly owned subsidiary of African Bank Holdings.