Download - African Bank

Short to medium-term objectives
OBJECTIVE ACHIEVEMENT
Enhanced underwriting competency African Bank Retail identified and sized incremental target populations; cautiously testing its way
into the markets. It developed enhanced data mining and analysis competencies to enable
detailed and timely assessment of underwriting effectiveness, and developed flexible models,
segmentation strategies, and policies that allow it to capitalise on prior learnings when moving
into new markets.
Cautious opening up of advances growth The lending books of African Bank Retail grew by 11,2% during 2003, on the back of a 17,0%
growth in sales. The growth has in part been attributed to the successful pilot and subsequent
launch of new products, as well as the extension of term and loan value on products that have
demonstrated strong collections performance.
Credit Indemnity selectively relaxed its credit granting policy by rewarding good clients with
longer-term loans at lower rates with larger average loan sizes. This contributed to its book
growing by 27,9%.
Capital management African Bank achieved a credit rating upgrade, on the back of which it raised R1 billion in ABL2
bonds. The balance sheet was restructured to reduce excess capital and reduce cost of funding.
This enabled the group to return R863 million to shareholders.
Medium-term targeted cost-to-income The cost-to-income ratio was 36,2% (2002: 36,6%). Costs after taking the Saambou PLB acquisition
ratio below 35% into account, was down year on year. The group has initiated strategies to reduce costs further
in 2004.
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