The group has made provisions for higher credit impairments as well as for higher future insurance claims
African Bank, 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 after-tax profit by R614m.
The group 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, and prepares 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.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 and a number of other SA banks, which followed African Bank Investments’ collapse under a mountain of bad debt in 2014.
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