Full integrated annual report - African Bank - Investoreports

Banking business unit
Results at a glance continued
The above drivers combined to produce profi t before taxation of R3,2 billion, 24% higher than the R2,6 billion
achieved in 2010. The R912 million normal taxation charge for the year approximates the statutory corporate
tax rate of 28%.
The Banking business unit generated a return on assets of 5,5%, which geared 4,1 times, translated into a
return on equity of 22,9% (pro forma 2010: 19,7%).
Outlook
The Banking business unit will continue to benefi t from the lift in sales over the past year and the income that
will accrue from the higher asset base. Since the majority of the new outlets were opened towards the end of
the 2011 fi nancial year, the business unit should also see a lift in sales from the operation of these outlets for a
full year in 2012. The Bank has a number of additional products and initiatives that are in pilot phase and are
expected to be implemented over the next 12 months. The further rollout of kiosks and carve-outs, albeit at a
more modest pace, is also expected to boost sales.
African Bank continuously monitors the market for evidence of changing credit behaviour and emerging risk
and is cautious about the early evidence of some distressed customers. The Bank has adjusted its affordability
limits and recalibrated its score cards to take cognisance of the emerging risk and will continue to do so as
the environment changes. The Banking unit will be pursuing growth in the next year with a specifi c focus on
the quality of credit extended and a controlled mix of sales.
The main initiatives for 2012 will be:
Continuing our focus on our people and culture.
Further aligning and integrating the EHL credit infrastructure into the Bank.
Implementing the new customer interface across the entire infrastructure.
Broadening the sources of debt funding and optimising the gearing and capital structures.
Refi ning customer management processes with a specifi c emphasis on rehabilitation initiatives.
Enhancing our customer value proposition including the rollout of new products and further
product enhancements.
Focusing on operational excellence in terms of customer service, effi ciencies and processes.
Integrated report 2011 | African Bank Investments Limited 63