The loss of 4.24 billion rand compares with a profit of 2.82 billion rand a year earlier, the Johannesburg-based lender said in a statement today. Earnings per share excluding one-time items fell 89 percent to 39.6 cents, while income from operations rose 16 percent to 20.1 billion rand.
African Bank, which targets low-income earners with unsecured credit, increased bad-loan provisions as consumers struggle to repay debt and said the impairment relates to its unprofitable Ellerines furniture-retailing business. The bank starts a 5.5 billion-rand rights offer today.
“The banking unit was negatively impacted by slower disbursement and advances growth, as well as deteriorating asset quality with commensurate higher credit impairment charges and credit life insurance claims,” African Bank said.
African Bank’s stock fell as much as 8.5 percent in Johannesburg before closing unchanged at 17 rand. The company will report full-year results on Nov. 11.
To contact the reporter on this story: Renee Bonorchis in Johannesburg at firstname.lastname@example.org
To contact the editor responsible for this story: Dale Crofts at email@example.com