Access this podcast on iono.fm using the link above.
JIMMY MOYAHA: Earlier today, at approximately 09:20, African Bank Limited released its interim results for the six months ending 31st March 2026.
As the new financial year commenced, there was a slight uptick in credit loss ratios, an increase in credit impairments, and total income before expenses experienced a decline of about R1.5 billion.
To explore these figures further, we have the company’s interim CEO on the line. Zweli Manyathi, thank you for joining us.
Congratulations on the recent leadership transition at African Bank. We haven’t had the chance to touch base since then. How is your team feeling about these interim results as they relate to your new financial year?
ZWELI MANYATHI: Thank you for having us. We view these results with seriousness. They expose the challenging market conditions, especially for our customer demographic.
We’ve taken time to evaluate whether our operations align with our objectives.
Through extensive assessments, we identified areas needing improvement and are developing actionable plans for adjustment.
While the results were disappointing, our commitment remains strong. We understand the necessary steps to restore our health over time. This is a gradual process, not a six-month fix, but it’s our current reality.
JIMMY MOYAHA: In the banking industry, especially for a firm like African Bank, perseverance is key.
Zweli, let’s dive into the internal transformations, corporate announcements, and adjustments underway, including your leadership shift and the appointment of a CEO for the Personal Banking division.
ADVERTISEMENT
CONTINUE READING BELOW
Can you outline some of the management changes and how these are strategically realigning the business?
ZWELI MANYATHI: These changes are part of a thorough business review we conducted.
This review has involved scrutinizing our personal banking and business segments to ensure our offerings are relevant and comprehensive.
We have implemented several adjustments and are in the process of executing them.
Next, we will define our operational model moving forward for this business structure.
We’ve realized we need to streamline, especially in terms of how many roles we currently maintain.
It’s essential to rethink our structure while maintaining effectiveness; consolidating tasks could streamline operations. Presently, we’re attempting around 43 initiatives, which is overly ambitious. My aim is to refine these to 10 impactful projects to provide clearer direction for the organization.
I’m confident we have a transparent action plan for these initiatives.
It’s crucial to note that a deliberate strategy was put in place to reduce our balance sheet concerning assets.
We’ve divested certain underperforming assets, leading to a decrease in net interest income; however, this was a strategic decision to remove low-quality assets.
ADVERTISEMENT:
CONTINUE READING BELOW
Additionally, we’ve scaled back our risk appetite. While this might seem reactionary, our goal was to ensure that the business we engage in is profitable short term.
Consequently, our origination in personal banking has dropped from about R850 million a month to approximately R250 million.
This equates to a reduction of R500 million. Currently, our remaining book is R750 million, indicating a notable decline unless we can attract demand from quality customers, which will take time.
Managing costs remains a top priority for me as it’s an area within our control.
We have established improvement targets for the next three years, backed by a clear strategy to achieve these.
Regarding costs, I’m confident we understand the measures needed for improvement.
Lastly, I want to emphasize the significance of non-interest income, which is vital for the bank since it requires less capital. Although we haven’t seen significant growth in this area recently, our future focus will be on it.
I am optimistic that with the right team, we can navigate the upcoming challenges.
It’s critical to have suitable individuals in key roles. Happy Ralinala is now leading Personal Banking. We’ve successfully evaluated candidates for other critical positions, including a CEO for Business and Commercial and for our Insurance division.
All candidates have been forwarded to the Prudential Authority, and we await swift approval.
ADVERTISEMENT:
CONTINUE READING BELOW
JIMMY MOYAHA: Before we wrap up, I want to revisit a discussion with your predecessor regarding African Bank’s ambition to relist on the Johannesburg Stock Exchange, aimed for around 2027.
Given the ongoing consolidation and the strategic shifts you mentioned, will this affect the timeline for the listing, or are we still aligned with that initial plan?
ZWELI MANYATHI: It will indeed influence the timeline. We need to consider that—
Before any listing, we should demonstrate several years of consistent performance, and 2026 will not reflect that.
This requires an adjustment in our timeline.
Once we have engaged fully with the executive team and the board, we’ll communicate this new timeline to stakeholders; demonstrating our capability to deliver solid performance over three years is crucial before pursuing the listing.
Nevertheless, this doesn’t imply a delay concerning the IPO. Our pre-IPO efforts aim to prevent any excess shares from being available for trade upon listing. We must still implement our management and retail plans before moving forward, but the actual listing will indeed be postponed.
JIMMY MOYAHA: A business in transition, aligning its strategies for future ambitions.
Wishing you and your team the best, Mr. Manyathi. Welcome to the challenging field of leading a commercial bank in South Africa. We look forward to seeing how the remainder of the year unfolds for you and your team.
Zweli Manyathi, CEO of African Bank, joined us to discuss their interim results for the first half.
