African Bank, which this week marked 50 years, a period in which it survived a near-death experience a decade ago, is looking to win market share in the highly competitive business banking segment.
The personal and business & commercial lender traces its roots to July 1975, when a group of black business people, led by entrepreneur Sam Motsuenyane put together R1m to establish the bank.
Since then, the lender’s journey has been fraught with danger and promise. The existence of the bank was on tenterhooks in 2014 when the SA Reserve Bank placed it under curatorship after the lender granted many bad loans to too many South Africans who could not afford to pay them back.
A consortium of SA’s largest banks came to the party salvaging all African Bank’s viable assets. African Bank Holdings is the holding company, 50%-owned by the SA Reserve Bank, while a consortium of five SA banks holds the other 25% on a pro-rata basis. The Government Employees Pension Fund (GEPF) owns the other 25%.
The Reserve Bank is expected to ditch its shareholding when African Bank goes public within the next few years after having staged a recovery in its fortunes.
African Bank has now reflected on its turnaround and near death experience. The lender, which today boasts more than 6-million clients, has been on a digital transformation, with 67% of its customers banking digitally.
“The acquisition of Grindrod Bank in 2023 marked a pivotal move into business banking, bringing with it a strong corporate client base and specialised lending expertise,” the bank said.
“Followed by the strategic acquisition of Sasfin’s capital equipment finance and commercial property finance businesses, this further bolstered the bank’s offering to SMEs, laying the groundwork for a more resilient financial institution serving individuals, entrepreneurs and corporates alike,” it said.
“The bank also launched digital lending for SMEs, enabling rapid, paperless applications (R20,000 to R5m) with approvals in under 24 hours; a lifeline for township entrepreneurs and business owners.”
The lender has set a target of listing on the JSE after its 2027 results. The group has established its iKamva Lethu employee share scheme, with a 10% allocation. It said last week it was a step closer to completing the purchase of Eskom’s R5.7bn staff home loan book, with the deal now subject to regulatory competition approvals.
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