| Mon 12 Nov 2007, 7:05 | | ABLP / ABL - African Bank Investments - Reviewed R |
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ABL ABLP
ABL
ABLP / ABL - African Bank Investments - Reviewed Results For The Year Ended
30 September 2007 and dividend declaration
AFRICAN BANK INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registered bank controlling company)
(Registration number 1946/021193/06)
Ordinary share code: ABL ISIN: ZAE000030060
Preference share code: ABLP ISIN: ZAE000065215
("ABIL" or "the Company")
REVIEWED RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2007
OVERVIEW
ABIL generated headline earnings of R1 334 million (2006: R1 109 million), an
increase of 20% on the prior year. Headline earnings per share increased by
20% to 268,4 cents (2006: 223,3 cents), while dividends per share increased
13% to 225 cents (2006: 200 cents). Basic earnings attributable to ordinary
shareholders of R1 334 million (2006: R1 140 million) grew by 17% over the
equivalent period, at a slower pace to headline earnings because of the R31
million capital profit made on the sale of the Commercial Vehicle Finance
division in 2006. Return on assets reduced from 14,2% to 13,5% as a result of
the price reduction strategies, whilst improved gearing from 3,9 to 4,5 times
resulted in the return on equity increasing from 55,3% to 60,6%.
The 2007 financial year has been a pivotal year for the ABIL group in terms
of its evolving strategy. Continued refinement of the risk differentiated
underwriting models and cost control allowed the group to further reduce
pricing for all clients, resulting in significant volume elasticity. The
lower risk clients were able to benefit from increased average terms and
larger loan sizes. At the same time ABIL tightened the credit and
affordability criteria to higher risk clients against a backdrop of increased
credit supply to certain segments of the market, resulting in increased
decline rates to these clients. In addition the group`s proactive approach to
and early adoption of many of the National Credit Act (NCA) requirements,
resulted in a smooth transition to the new Act on 1 June 2007. This paved the
way for the unlocking of the opportunities that the NCA presented, resulting
in a strong 4th quarter, with sales of new loans up 53% over the same quarter
in 2006. Finally, ABIL launched its offer to acquire 100% of the Ellerines
group, affording the group the opportunity to leapfrog its growth and
expansion strategy over the next 3 to 5 years.
As previously communicated, the group has been driving a strategy of bringing
down the cost of credit to its clients. This process, which began in 2005,
involved, firstly, the refinement of the group`s underwriting models from 3
to 8, then 25 and now 50 discrete risk bands. Within each of these risk
bands, products are tailored with regard to price, term, loan size and
affordability variables. Coupled with this, the pricing models have been
developed to take into account not only the default probability, but also the
cost absorption and associated weighted average cost of capital for each risk
band. The objective of both of these strategies has been to remove as much
cross-subsidisation from the underwriting models as possible.
ABIL`s customers have responded positively to these improvements, and
therefore, whilst the overall yield earned on the advances book has been
reduced by 4,6%, the gross advances book has grown by 41% during the year,
resulting in an 18% growth in the total revenue earned by the group. As a
consequence of the growth, cost efficiency has further improved, creating
room for further price cuts, whilst NPL levels and the bad debt charge have
remained within the group`s targeted levels.
In order to measure performance which encapsulates both return on equity and
the growth in profits, the group focuses on economic profit as a financial
target. Economic profit is arrived at after deducting a charge for the cost
of equity. During the current financial year, ABIL generated an economic
profit of R1 004 million, a 24% increase over the prior year.
Operational performance
The drivers of the results for the 12 months were:
- Advances : Sales increased by 31% over the year, which, combined with
the extension of average term from 21 to 29 months, resulted in advances
growing by 41%. Given that growth was particularly strong in the second
half of the year, average gross advances for the year grew by a lesser
29%.
- Yields : The overall yield on advances was reduced to 49,2% (2006:
53,8%). Sales volume increase and related advances book growth from the
price reductions has again exceeded our price/volume elasticity
assumptions. The latest series of price cuts took place in September
2007.
- Operating costs : Expenditure increased 4% to R1 091 million (2006: R1
048 million) which resulted in the cost to average advances ratio
falling from 14,7% for the prior period to 11,8%.
- Bad debts : The charge for bad debt increased by R217 million to R823
million or 8,9% of average advances (2006: 8,5%). NPL coverage has
reduced to 63,0% (2006: 64,8%), due to higher actual cashflows being
achieved on these portfolios than that assumed in the previous year`s
IAS 39 models. Write-offs of R549 million (2006: R455 million) represent
5,9% (2006: 6,4%) of average advances, although this ratio is distorted
by the recent strong growth in gross advances and rehabilitated loans.
- Funding costs : The average cost of funds fell marginally to 9,7% (2006:
9,9%) as older more expensive funding was settled on maturity. Given
that the majority of funding is fixed at long-term rates, the recent
rises in short-term interest rates have had little effect on the group`s
funding costs.
The above drivers combined to produce a 19% increase in profit from
operations from R1 792 million to R2 129 million.
- Taxation : The all-in tax rate was 36,5% (2006: 37,3%). In addition to
the normal corporate tax rate of 29%, the group paid R138 million in STC
on dividends (2006: R118 million). Indirect taxes reduced to R38 million
(2006: R46 million), as a result of the abolition of RSC levies and
improved VAT apportionment ratio.
Dividends
The ABIL board declared a final ordinary dividend of 130 cents per share
bringing the total dividends for the year to 225 cents (2006: 200 cents per
share). This full year ordinary dividend is covered 1,2 times by basic
earnings attributable to ordinary shareholders. The group also declared a
final preference dividend of 460 cents per share.
National Credit Act (NCA)
The introduction of the NCA unified, under a single regulatory framework, the
previously three separate credit markets that operated within South Africa,
namely the Usury Act, the Credit Agreements Act (CCA) and the Exemption
Notice to the Usury Act. The conversion process had differing implications,
depending from which regulatory regime a credit provider was migrating. For
example, the NCA requires much greater focus on affordability than the Usury
Act, the new price caps placed a challenge on lenders under the exemption
notice, whilst lenders under the CCA had to change pricing structures and
documentation standards extensively. This, together with varying degrees of
preparedness by participants in the industry, resulted in a wide disparity of
reported impacts on credit providers during the first few months after the 1
June 2007 implementation date.
Inevitably though, these initial disruptions will settle and the markets will
begin to converge and normalise. ABIL believes that the introduction of the
NCA will in time have a profound effect on the landscape of the credit
markets in South Africa, particularly within the target market of the ABIL
group. For this reason, we took a proactive approach to the NCA and early
adopted many of the required changes, so that we could focus on the
opportunities that emerged as a result of the NCA.
In particular, these opportunities have allowed us to move beyond the R10 000
loan limit and 36-month term barriers imposed by the Exemption Notice to the
Usury Act, to risk price products more appropriately, roll out our credit
card product more extensively, and to address a wider market than was
previously possible. In addition, we believe that a more competitive and
unified market will, over time, grow the overall size of the credit market
(as observed in other industries) and we have positioned our strategies to
take advantage of this. We also believe that as the market converges, becomes
more competitive and products commoditise, there will be a greater degree of
importance placed on pricing, customer service levels and convenient
distribution. Being a specialist credit provider, ABIL is well positioned to
take advantage of these trends.
Capital, funding and liquidity
Capital, funding and liquidity strategies, which ultimately translate into
the weighted average cost of capital (WACC), remain a high priority for ABIL.
Whilst a too aggressive approach to these strategies poses a risk of failure
or collapse, there is an equally important risk that a too conservative
approach will result in the business not being competitive in the pricing of
its products and accordingly will ultimately also fail, albeit more slowly.
We believe that capital and funding strategies need to look beyond the scope
of traditional risk management and mitigation practices or regulatory
compliance. Being a bank with a narrow focus and higher risk profile,
traditional banking benchmarks are not appropriate for the ABIL business
model.
The strategic objective of ABIL`s capital and funding management is to
optimise the WACC of the organisation in order to achieve a balance between a
competitive customer proposition, and a sustainable business model that will
survive through the cycles.
ABIL`s approach has been to maintain a conservative stance with regard to
funding and liquidity strategies, whilst moving its capital ratios to more
optimal levels. The following principles have formed the basis of the group`s
strategies in this regard:
- The group has been managing down its capital ratio from over 40% in
2003, towards the 25% optimal capital ratio informed by its internal
economic capital model. This, together with the introduction of
preference shares and subordinated debt, which account for 30% of the
qualifying capital, have resulted in a substantial reduction in the
WACC;
- ABIL focuses on long-term wholesale funding through its listed bond
programme and internal treasury, such that the average maturity of its
liabilities is at least twice that of its assets. In addition, the
group ensures that it maintains a positive liquidity gap at all maturity
points;
- Concentration risk is managed such that no individual lender makes up
more than 15% of the funding base;
- Cash reserves are maintained equal to at least 100% of the next 3 months
maturing liabilities; and
- A neutral interest rate risk position is maintained at all times.
ABIL has maintained a solid liquidity and funding position, so as to be able
to adequately and efficiently fund the growth in the advances book during the
period. The group raised R5.1 billion of new funding in 2007 versus R2.2
billion in 2006. We remain confident that our capital and funding strategies
are appropriate to ensure the sustained growth of the business.
The proposed Ellerine Holdings Limited acquisition (Ellerines)
ABIL announced during August 2007, an offer to acquire 100% of the Ellerines
group, a successful and established credit and cash retail furniture and
appliance business operating a number of well known household brands through
some 1 300 outlets with approximately 1.1 million credit active clients. In
its retail credit divisions, the Ellerines group sells goods largely on
credit to clients that ABIL presently targets or intends to in the future.
ABIL estimates that approximately 70% of Ellerines` profits are derived from
its financial services activities (credit and insurance) and 30% from its
retail activities.
The joining of the two businesses under a single ownership structure will
optimise the opportunities to play a leading role in the reshaping of the
retail and financial services offering to this market. Ellerines has a proven
and experienced retail expertise, and ABIL is confident that the retail
business will continue to grow and increase its market share, powered by an
enhanced financial services offering.
The opportunities and advantages that emerge from the combining of the two
groups are significant and far reaching including:
- Greater critical mass for the financial services business of the
combined group. The combining of the two groups will double the joint
client base to more than two million active credit clients and increase
the gross advances book to approximately R17 billion. The benefits of
this critical mass will allow the group to become more cost efficient
and thereby further reduce the cost of credit to the market;
- A greater distribution footprint with close to 1 900 branches and
outlets, compared to ABIL`s existing 550 branches and outlets, improving
client accessibility and service;
- The ability to introduce ABIL`s better price and risk differentiation
underwriting models into the Ellerines distribution channel. This
creates greater credit capacity for lower risk clients, which in turn
creates greater purchasing power and increased market share;
- Improved product offerings and flexibility for Ellerines clients. ABIL
intends to implement and further innovate its card-based technology to
offer retail clients a more flexible credit offering with greater
convenience. This will also give ABIL the opportunity to achieve
critical mass in its card operations;
- Ellerines operates in a wider target market than ABIL and unlike ABIL
has gained experience in lending to more affluent clients as well as to
people that are informally employed and/or who do not have bank
accounts. This will enable ABIL to expand its target market through the
increased distribution footprint and gain experience in these areas; and
- ABIL estimates that there is approximately R2 billion of surplus capital
in Ellerines that can over time be more effectively funded via debt and
tier 2 capital instruments. This in turn will lower the weighted average
cost of capital, enabling more competitive product pricing.
At the date of the finalisation of this report, both ABIL and Ellerines
shareholders had voted in favour of the transaction. All the conditions
precedent had been met except for the approval from the Competitions
authorities. Their final decision is expected towards the end of November or
early December 2007. Given regulatory restrictions, the group has not been
able to perform a comprehensive analysis of the post acquisition
opportunities and priorities, nor interact with the Ellerines management to
discuss these. Once the final regulatory approvals have been received and the
acquisition is completed, ABIL will be in a position to work with the
Ellerines management in order to construct a strategic blueprint for the
future, and as soon as these are agreed, the group will communicate its plans
to all stakeholders.
Looking ahead
ABIL`s intent is to entrench its position as the market leader in a larger,
more competitive and fast changing unsecured credit market, fuelled by the
introduction of the NCA and a growing and transforming economy. Overlaid onto
this is the recognition that the current credit cycle is such that there are
pockets of high risk consumers who have taken up or are vulnerable to taking
up higher levels of credit, and the group will continue to calibrate its risk
appetite, underwriting models and pricing to manage through the current
cycle. Key to achieving success in our strategies are:
Continuing to drive down the cost of credit to our clients in order to make
the business more competitive and increase the demand for and affordability
of unsecured credit. This is enabled through continued refinement in the
underwriting models and risk segmentation, and tight cost control;
- Increasing the universe of clients that we engage with through improved
leverage of our brand and distribution footprint, developing more
focused products to meet their requirements and innovating new risk
models;
- Exploring opportunities to expand our reach to customers at the point of
sale;
- Continuing the development and growth of the credit card product in
order to take it to scale;
- Improve levels of client service through faster turnaround, higher
acceptance rates and convenient access to credit; and
- Integration of the Ellerines business, and leveraging the opportunities
ABIL brings to their credit offering.
We are confident that we will achieve our stated financial objectives for the
2008 financial year. We will continue to use the high return on equity
currently being achieved to strengthen our competitive position and growth
prospects through further risk discovery and price reductions to our clients.
DIVIDEND DECLARATION
Preference dividend declaration
The board of directors proposed and approved on 9 November 2007 and declared
on Monday, 12 November 2007 the cash dividend No 6 of 460 cents per
preference share.
The dividend was calculated using the following parameters:
Average prime overdraft interest rate for
the period 13,38%
Coupon rate as percentage of prime 69%
No of days 182
Salient dates for dividend payments:
Last day to trade
cum-dividend Friday, 30 November 2007
Shares commence trading
ex-dividend Monday, 3 December 2007
Record date Friday, 7 December 2007
Dividend payment date Monday, 10 December 2007
Share certificates may not be dematerialised or rematerialised between
Monday, 3 December 2007 and Friday, 7 December 2007, both days inclusive.
Final dividend declaration
The board of directors proposed and approved on 9 November and declared on 12
November 2007 a final cash dividend No 14 of 130 cents per ordinary share.
Salient dates for dividend payments:
Last day to trade
cum-dividend Friday, 30 November 2007
Shares commence trading
ex-dividend Monday, 3 December 2007
Record date Friday, 7 December 2007
Dividend payment date Monday, 10 December 2007
Share certificates may not be dematerialised or rematerialised between
Monday, 3 December 2007 and Friday, 7 December 2007, both days inclusive.
REVIEW OPINION
These results have been reviewed by Deloitte & Touche and their unmodified
review opinion is available for inspection at the Company`s registered
office.
ACCOUNTING POLICIES
These condensed group consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS) and comply
with International Accounting Standard (IAS) 34 and the requirements of the
South African Companies Act, Act number 61 of 1973, as amended.
The accounting policies and methods of computation of the group are
consistent with those applied in the previous year. During the current year
the group adopted IFRIC 8 - Share based payments (refer to the statement of
changes in equity for the effect) and circular 8/2007 issued by SAICA
relating to the disclosure and calculation of headline earnings and headline
earnings per share.
CHANGES TO THE BOARD OF DIRECTORS
ABIL announced on 12 March 2007 the appointment of Mutle Mogase as an
independent non-executive director of ABIL and African Bank Limited.
On behalf of the board
Ashley Mabogoane, Chairman
Gordon Schachat, Executive deputy chairman
Leon Kirkinis, Chief executive officer
12 November 2007
Board of directors
AS Mabogoane (Chairman), G Schachat (Deputy chairman)*, L Kirkinis (CEO)*, A
Fourie*, DB Gibbon, BD Goba, MC Mogase, R Naidoo, TM Sokutu*, BPF Steele, GZ
Steffens (German), DFG Tembe (Mozambique) A Tugendhaft, DF Woollam *
* Executive
Group Secretary
S Martin
Share transfer secretaries
Link Market Services SA (Pty) Ltd
11 Diagonal Street, Johannesburg, 2001
PO Box 4844, Johannesburg, 2000.
Telephone: +27 11 630 0800
Telefax: +27 86 674 4381
africanbank@linkmarketservices.co.za
Registered office
59 16th Road
Midrand, 1685
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Investor relations and shareholder details
Gary Rowe
Telephone: +27 11 256 9147
Telefax: +27 86 601 3064
Leeanne Goliath
Telephone: +27 11 256 9232
Telefax: +27 11 207 3830
Hilda Sons
Telephone: +27 11 256 9196
Telefax: +27 11 315 3404
Email: investor.relations@africanbank.co.za or growe@africanbank.co.za
Company`s websites
www.africanbank.co.za
www.eyomhlaba.co.za
Group income statement
for the 12 months ended 30 September 2007
Reviewed Audited
R million % change 2007 2006
Interest income on
advances 4 3 098 2 974
Net assurance income 75 742 424
Non-interest income 59 707 446
Total revenue 18 4 547 3 844
Charge for bad and doubtful
advances (36) (823) (606)
Risk-adjusted revenue 15 3 724 3 238
Other interest income 50 170 113
Interest expense (37) (636) (465)
Operating costs (4) (1 091) (1 048)
Indirect taxation: VAT
and RSC 17 (38) (46)
Profit from operations 19 2 129 1 792
Capital items (100) 0 37
Profit before taxation 16 2 129 1 829
Direct taxation: STC (17) (138) (118)
Direct taxation: SA normal (15) (616) (535)
Profit for the year 17 1 375 1 176
Reconciliation of headline
earnings and per share
statistics
Basic earnings (profit for the
year) attributable to: 17 1 375 1 176
Preference shareholders 14 41 36
Ordinary shareholders 17 1 334 1 140
Basic earnings attributable
to ordinary shareholders 17 1 334 1 140
Adjusted for: Capital items 0 (37)
Capital gains tax thereon 0 6
Headline earnings 20 1 334 1 109
Number of shares in issue
(net of treasury) million 497,2 496,9
Weighted number of
shares in issue million 497,1 496,7
Fully diluted number
of shares in issue million 497,4 497,2
Basic earnings
per share cents 17 268,4 229,5
Fully diluted basic
earnings per share cents 17 268,2 229,3
Headline earnings
per share cents 20 268,4 223,3
Fully diluted headline
earnings per share cents 20 268,2 223,1
Dividends per ordinary share
Interim - paid cents 19 95 80
Final - declared cents 8 130 120
Total ordinary
dividends cents 13 225 200
Group balance sheet
as at 30 September 2007
Reviewed Audited
R million % change 2007 2006
Assets
Property and equipment 34 155 116
Policyholders` investments (83) 15 87
Deferred tax asset (7) 143 153
Net advances 44 8 752 6 064
Gross advances 41 10 890 7 727
Deferred administration fees 8 (246) (228)
Impairment provisions 32 (1 892) (1 435)
Other assets >100 45 12
Taxation 86 13 7
Statutory assets - bank
and insurance 42 668 472
Short-term deposits and cash 57 1 961 1 252
Total assets 44 11 752 8 163
Liabilities and equity
Life fund reserve (84) 16 103
Subordinated bonds/debentures 51 305 202
Bonds and other long-term
funding (note 1) 68 7 095 4 217
Short-term money market
funding (note 1) 81 808 447
Other liabilities 5 415 395
Taxation 36 148 109
Total liabilities 61 8 787 5 473
Ordinary shareholders` equity 12 2 482 2 207
Preference shareholders`
equity 0 483 483
Total equity (capital and
reserves) 10 2 965 2 690
Total liabilities and equity 44 11 752 8 163
Note 1
A reclassification of 2006 balances of R638 million from short-term to long-
term funding was made in order to align the classification based on the
original maturity of the instruments
Group statement of changes in equity
for the 12 months ended 30 September 2007
Ordinary shares Preference
Share Share- share
capital Distri- based Trea- capital
and butable payment sury and
premium reserves reserve shares premium Total
R million
Balance at
30 September
2005 (restated
- note 1) 12 1 817 358 (65) 483 2 605
IFRS (IAS 18)
adjustment -
administration
fees 0 (64) 0 0 0 (64)
IFRS (IAS 39)
adjustment -
impairments 0 (58) 0 0 0 (58)
Cancellation of
shares as a
result of odd-
lot offer 0 (14) 0 0 0 (14)
Dividends paid 0 (897) 0 0 (36) (933)
Shares purchased
into the ABIL
Share Trust
less shares issued
to employees
(cost) 0 0 0 18 0 18
Loss incurred on
group employees
acquiring
ABIL Share Trust
shares less
dividends
received 0 (14) 0 0 0 (14)
Treasury shares
disposed of by
subsidiary 0 0 0 23 0 23
IFRS 2 reserve
transactions
(employee share
options) 0 0 (49) 0 0 (49)
Profit for
the year 0 1 140 0 0 36 1 176
Balance at
30 September 2006
(restated) 12 1 910 309 (24) 483 2 690
Dividends paid 0 (1 070) 0 0 (41) (1 111)
Shares purchased
into the ABIL
Share
Trust less shares
issued to employees
(cost) 0 0 0 5 0 5
Loss incurred on
group employees
acquiring
ABIL Share Trust
shares less
dividends
received 0 (1) 0 0 0 (1)
IFRS 2 reserve
transactions
(employee share
options) 0 0 7 0 0 7
Profit for the
year 0 1 334 0 0 41 1 375
Balance at
30 September
2007 (reviewed) 12 2 173 316 (19) 483 2 965
Share-based
Distributable payment
Notes reserves reserve
1. Restatement of 2005 opening balance
Balance at 30 September 2005 as
previously stated 2 252 (77)
BEE expense as a result of the
adoption of IFRIC 8 (435) 435
Restated 30 September 2005 balance 1 817 358
ABIL concluded a BEE transaction during August 2005 by issuing 20,2 million
shares at par value to Eyomhlaba Investment Holdings Limited. IFRIC 8: Scope
of IFRS 2 and AC 503: Accounting for Black Economic Empowerment (BEE)
Transactions are effective for
the group for the first time in the current year (the group elected not to
early adopt these in 2006) and require retrospective application. In terms of
the standard, where equity instruments are issued to a BEE party at less than
market value, these are accounted for as share-based payments. Accordingly an
adjustment to the opening balance at 30 September 2005, by way of a transfer
from distributable reserves to the share-based payment reserve of R435
million, was required for the BEE transaction.
2. Treasury shares 30 Sep 30 Sep
2007 2006
Treasury shares at cost R million 19 24
Number of shares held million 0,7 1,0
Average cost per share Rand 25,38 24,26
3. Number of ordinary shares
at 30 September 2007
Total Weighted Diluted
Number of shares
in issue 497 911 307 497 911 307 497 911 307
Treasury shares
on hand (748 719) (846 185) (846 185)
Dilution as a result
of outstanding options 0 0 316 862
497 162 588 497 065 122 497 381 984
Group cash flow statement
for the 12 months ended 30 September 2007
Reviewed Audited
R million Notes 2007 2006
Cash generated from
operations 1 3 352 2 733
Increase in gross advances 2 (3 712) (1 987)
Increase in working capital (208) (108)
Indirect and direct taxation paid (749) (638)
Cash inflow/(outflow) from equity
accounted incentive transactions 3 (1)
Cash (outflow)/inflow from
investing activities (186) 127
Cash inflow from funding
activities 3 3 342 780
Preference shareholders`
payments and transactions (41) (36)
Ordinary shareholders` payments
and transactions (1 070) (897)
Increase/(decrease) in cash and
cash equivalents 731 (27)
Cash and cash equivalents at the
beginning of the year 1 363 1 390
Cash and cash equivalents at
the end of the year 4 2 094 1 363
Notes
1. Cash generated from operations
Profit from operations before indirect
taxation 2 167 1 838
Increase in deferred administration fees 18 82
Increase in impairment provisions 1 006 697
Other non-cashflow items 161 116
3 352 2 733
2. Increase in gross advances
Movement in gross advances (3 163) (1 273)
Opening balance of gross advances 7 727 6 454
Closing balance of gross advances (10 890) (7 727)
Bad debts written off (549) (455)
Advances disposed of 0 (259)
(3 712) (1 987)
3. Cash inflow from funding activities
Funding raised 5 138 2 166
Bonds issued 1 050 1 050
Subordinated bonds issued (tier 2
capital) 300 0
Other treasury funding raised 3 788 1 116
Funding redeemed (1 796) (1 386)
Bonds redeemed (909) (965)
Subordinated debentures redeemed (200) 0
Other treasury funding redeemed (687) (421)
3 342 780
4. Cash and cash equivalents at the end
of the year consist of:
Short-term deposits and cash 1 961 1 252
Statutory cash reserves - insurance 133 111
2 094 1 363
Advances
R million 30 Sep 30 Sep 30 Sep
2007 % growth 2006 % growth 2005
Retail 8 248 51 5 474 39 3 926
Mining 925 24 748 15 651
Credit card 466 >100 73 n/a 0
Payroll 462 (6) 494 (20) 614
Standard
Bank JV 256 (33) 383 10 348
Commercial
Vehicle
Finance 0 n/a 0 (100) 254
Paydown
portfolio 533 (4) 555 (16) 661
Gross
advances 10 890 41 7 727 20 6 454
Asset quality
30 Sep 30 Sep 30 Sep
R million % change 2007 2006 2005
Gross advances
Performing 43 7 886 5 514 4 812
Non-performing 36 3 004 2 213 1 642
41 10 890 7 727 6 454
Gross advances net
of deferred
administration fees
Gross advances 10 890 7 727 6 454
Deferred administration
fees 8 (246) (228) (55)
10 644 7 499 6 399
Impairment provisions
and credit life
reserves
Impairment provisions 33 1 892 1 425 979
Balance at the beginning
of the year 1 425 979 1 545
Impairment provisions
raised 1 016 825 627
Adjustment for the
transition
to IFRS (IAS 39) 0 82 0
Bad debts written off (549) (455) (1 219)
Acquisitions/(disposals)
of impairment provisions 0 (6) 26
Stangen credit life
reserves (100) 0 10 138
Total impairment
provisions
and credit
life reserves 32 1 892 1 435 1 117
12 mths to 12 mths to 12 mths to
R million % change 30 Sep 07 30 Sep 06 30 Sep 05
Income statement
charges
Charge for bad
and doubtful
advances 36 823 606 488
Impairment
provisions
raised 1 016 825 627
Bad debts
recovered (193) (219) (139)
Ratios (%)
NPLs as a %
of gross
advances 27,6 28,6 25,4
Impairment
provisions
as a % of NPLs 63,0 64,4 59,6
Stangen credit
life reserves
as a % of NPLs 0,0 0,5 8,4
Total impairment
provisions
and credit life
reserves as a % of
NPLs (NPL coverage) 63,0 64,8 68,0
Total impairment
provisions
and credit life
reserves as a %
of gross
advances 17,4 18,6 17,3
Income statement
charge for
bad debts as a %
of average
gross advances 8,9 8,5 7,9
Bad debt write-offs
as a % of average
gross advances 5,9 6,4 19,7
Date: 12/11/2007 07:05:02 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
