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News24.com | African Bank posts profit as transactional accounts double

The number of opened MyWORLD accounts totalled 741 000 compared to 388 000 at the end of September 2020. Photo: Supplied

The number of opened MyWORLD accounts totalled 741 000 compared to 388 000 at the end of September 2020. Photo: Supplied

African Bank is back in the black - reporting a R2 million profit after tax for the financial year to 30 September, from a R560 million loss in 2020. 

At the group level – when including African Bank's insurance operations – the company posted an after-tax profit of R534 million compared to a loss of R27 million in September 2020.

African Bank said the year to end-September was significantly better because the higher credit impairment charge that the company raised a year ago was sufficient to account for the increased risk of default this year. Furthermore, the bank achieved strong debt collections.

African Bank's credit impairment charge to cater for bad debt and possible defaults decreased to R1.3 billion, after hitting R3.4 billion in 2020.

A highlight of the past year, was the demand for African Bank's MyWORLD transactional banking accounts.

Some 741 000 of these accounts have now been established, compared to 388 000 at the end of September 2020. 

African Bank launched the MyWORLD account transactional product in May 2019, just as new challenger banks, TymeBank and Discovery Bank, also emerged on the scene.

Until then, African Bank was not competing with the other banks in the transactional banking space. It was primarily focused on lending and savings.

Some 398 000 of these transactional accounts contained funds, from 200 000 in 2020.

Transactional balances in these MyWORLD accounts stood at R914 million on 30 September, a 133% increase from R392 million last year.

In total, African Bank attracted R10.3 billion in retail customer deposits, including these MyWORLD transactional banking balances. Most of the money is, however, sitting in the longer-term retail savings deposits.

"Usage of the transactional accounts is also rising, with 17.3 million transactions having been processed," wrote the bank in the results announcement. These transactions represented R24.5 billion in value in the current year.

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