By African Bank said it will shift from acquisitions to consolidation after its six-month loss widened, as integration costs and higher credit impairments weighed on interim results.
The South African lender reported total net income from operations before impairments of 3.272 billion rand for the six months ended March 31, down from 3.779 billion rand a year earlier. Credit impairments rose to 1.787 billion rand from 1.222 billion rand, pushing the credit-loss ratio to 7.7% from 5.3%.
Total income before expenses fell to 1.485 billion rand from 2.557 billion rand. The bank said the period reflected the cost of integrating three banks acquired over four years, including spending on systems and an organisational redesign.
The balance sheet continued to grow. Total assets rose 14% to 58.142 billion rand, net advances increased 5% to 41.166 billion rand and customer deposits climbed 18% to 38.7 billion rand. The capital-adequacy ratio was 25.8%, down from 26.7% in December.
African Bank’s June 25 release said management would focus on embedding the acquired capabilities and creating synergies, while a July statement said the lender was considering a Section 189A process. That points to a period of cost control and operational consolidation rather than another acquisition-led expansion.
