African Bank Holdings, the group that was resurrected from the ashes of its former parent African Bank Investments (Abil) after its near collapse in 2014, has paid out its maiden dividend.
The group, which houses the new African Bank lending unit and also sells credit life insurance and funeral policies, on Friday paid its inaugural gross dividend of 20c per ordinary share to its shareholders. With issued share capital of 500-million ordinary shares on the date of the dividend declaration, the total ordinary shareholder payout amounts to R100m.
“This inaugural dividend illustrates the group’s continued commitment to adding value to its shareholders, in line with the Bank’s evident growth trajectory and journey to its public offering in 2025,” said African Bank CEO Kennedy Bungane.
African Bank Holdings is 50%-owned by the SA Reserve Bank, with the Government Employees Pension Fund (GEPF) holding 25%. A consortium of SA’s five largest banks holds the remaining 25% on a pro-rata basis: FirstRand (7%), Standard Bank (6%), Absa Trading and Investment (5%), Nedbank (4%), Investec (2%) and Capitec (1%).
The group’s shareholding structure is a result of the Bank’s decision to place the lending unit of its predecessor, Abil, under curatorship in August 2014. Under the Bank-led curatorship, the old African Bank was split into a good and bad bank with the country’s largest lenders agreeing to underwrite a R10bn capital-raising exercise to kick-start its revival.
The new African Bank housed the loans deemed viable while bad debts remained in the old African Bank, which now operates as Residual Debt Services (RDS). The new, healthy bank started operating again in April 2016 as African Bank Holdings, which also houses insurance businesses and is diversifying into business banking after the purchase of Grindrod Bank in 2022.
It is also integrating Ubank, which was operating under curatorship, in a deal that became effective in November 2022 and gives it 4.7-million additional accounts in mostly rural and mining communities.
“With our recent acquisition of Grindrod Bank as well as UBank, the bank is well-positioned to continue providing value to our shareholders and have impact with consumers and the market,” said Bungane.
African Bank Holdings is implementing its “Excelerate25” strategy, which will involve it seeking a listing by 2025. That will allow the Reserve Bank to offload its 50% shareholding in the group.
The Bank has said it is seeking an “orderly exit” from African Bank Holdings to remedy a triple conflict, in which it is the group’s largest shareholder as well as its industry regulator and lender of last resort.
As part of African Bank Holdings’ listing strategy, it wants to more than double retail customer numbers to 3.5-million while targeting 100,000 small- and medium-sized enterprises business clients by 2025.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.