The lending unit of African Bank Investments Ltd., which failed in August, said losses for the six months ended March narrowed from a year earlier as efforts to re-establish a viable company continue.
The bank recorded a loss of 2.79 billion rand ($230 million) compared with a restated loss of 5.9 billion rand in the previous period, the Johannesburg-based lender said in a statement Friday. The credit impairment charge improved to 5.4 billion rand from 8.5 billion rand.
While impairments improved, they remain high, “principally due to the deterioration in the advances book that existed” before the bank collapsed, the lender said. “Losses will persist for the foreseeable future,” Tom Winterboer, the bank’s administrator, said in the statement.
African Bank collapsed last year amid record losses and a lack of funding. The South African Reserve Bank stepped in to affect a rescue, appointing Winterboer to corral the lender’s remaining viable assets into a so-called good bank. That business is awaiting a fresh banking license and may be operational by the fourth quarter of this year.
Cash and cash equivalents at the end of the first half rose to 8.4 billion rand from 6.6 billion rand in the previous period, the company said.
The results are line with expectations, Winterboer said. “The restoration to profitability and subsequent achievement of acceptable investor returns in the ‘good bank’ will take time, effort and commitment,” he said.
Holding company African Bank Investments reported results for its full year ended September on June 11.