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Letter to stakeholders continued develop a comprehensive organisation-wide sustainability strategy. Examples of such strategies are aligning the organisation towards a more client-focused orientation and reducing the extent of the cross subsidisation of poorer performing clients by better performing clients. 3. Driving client focus throughout the group ABIL has thrived in a high-risk industry as a result of two core competencies: its ability to underwrite and price for risk in a high-risk market, and its ability to effectively collect in this market. Understanding client behaviour underpins both of these. Continuing to invest in and improve the credit underwriting and collection processes is key to the group’s sustainability. Increased client understanding opens up new opportunities to develop differentiating strategies for different types of clients. ABIL is in the process of implementing behavioural scorecards throughout the group to enable it to reward good clients – which should lead to improved client loyalty and retention. Behavioural scorecards will also assist in making progress on the rehabilitation of clients in financial distress. 4. Carefully exploring growth opportunities in other geographies Currently, ABIL is a South African organisation, with no business interests outside the country’s borders. This has been a deliberate strategy; the aim was to first succeed in the local market before considering geographical expansion. The group believes the time is right to carefully explore business opportunities outside South Africa as part of its growth strategy. Entering other geographies depend on three key considerations: the economic attractiveness of a particular market; African Bank Investments Limited 8 the suitability, stability and effectiveness of the regulatory environment; and ABIL’s ability to sustainably compete in that market. In entering other geographies, the group will follow a low-risk expansion strategy, carefully testing such markets, partnering local complementary expertise and piloting the appropriate business model in each case. 5. Further cost efficiencies Sustainability requires us to be the lowest-cost producer in the markets we serve. We have made progress in aligning our cost structures with customer requirements, and our cost-to-income ratio is declining. At the same time however, the cost-toassets ratio climbed to almost 20%. In some areas of the group’s business – especially in overhead costs, further opportunities for cost alignment exist. The group intends to manage costs in both relative and absolute terms. In relative terms, the goal is to decrease the cost-to-income ratio to below 35% and its cost-to-assets to 17,5% or below. ABIL aims to manage its costs towards a long-term downward trend in real terms. In the past year, we have reviewed our business processes to identify and implement cost savings. The next year will see a continuation of this, as well as progress towards designing the right cost management systems in all areas of our business. In addition, we will refine performance management systems to create the cost culture we require. Further cost reductions will ensure that ABIL remain ahead of anticipated changes in the competitive landscape in the medium term. 6. Creating a performance culture throughout the group During the year we measured the culture in African Bank, and identified the positive and negative aspects of the culture. The main requirements identified in the culture audit included communication of the African Bank vision and strategy to employees in a way they understand, developing a corporate culture that leads to increased trust and openness, enhancing the financial and nonfinancial levers of the performance management system and improving coordination and communication around performance issues at individual and organisational level. Based on the results of this audit, African Bank Retail is in the process of designing a culture change process, which will be implemented during 2004. The goal of the culture change will be to address these areas of weakness. No culture audits were done for Specialised Lending. The aim is to conduct these audits during 2004, and address weaknesses identified. Strengthening the board and management team As part of its commitment to maintaining the highest standards of corporate governance, the ABIL board, in 2002, commissioned an independent review of the group’s corporate governance structures and processes by Woodburn Mann, an associate of the Whitehead Mann Group plc in the UK. The review included: The development of a board composition and performance model reflecting the committed strategic direction of the group and the requirements of King II. An assessment of the alignment of the skills, experience and expertise available on the board and board committees. An evaluation of the performance of the chairman, chief executive, executive and non-executive directors, by their peers. The outcome of the review identified a number of gaps within the board and has informed the structuring and composition of the various governance structures over the past year. The board
Incwadi eya kwabanezabelo iqhutshiwe kokusebenza ozoqinisa ukubandakanyeka kwabaneqhaza, lihlole bese lilawula ubungozi (kuhlanganisa ubungozi benhlalo yomphakathi kanye neyendawo) bese liqinisa ukusebenzisana kanye nokubambisana ukuze kwakheke amathuba. Izinhlelo ezingumphumela kwalokho kubuyekezwa kokuqhubekezeleka sezivele seziyasebenza. Into okuzogxilwa kuyo ngo-2004 ngukwakha icebo elijulile lokuqhubekezela ukusebenza enhlanganweni yonke. Enye yezinto ezibalulekile okuzobhekwana nayo ngukususwa kokukhokhelwa kwabathile yilawo makhasimende asebenza kangcono. 3. Ukugqugquzela ukugxila kumakhasimende kulolonke iqoqo I-ABIL seyibe nempumelelo kulemboni enobungozi obukhulu ngenxa yamakhono amabili abaluleke kakhulu: ukukwazi ukuba ngummeleli kanye nokubeka inani lobungozi kwimakethe enobungozi obukhulu kanye nokukwazi ukuqoqa izikweletu ngokuyikho kulemakethe. Ukuqonda ukuziphatha kwamakhasimende kuyisizimelelo sakho kokubili lokhu. Ukuqhubeka ukutshala nokwenza ngcono izinhlelo zokummelela nokuqoqa izikweletu kungukhiye wokuqhubekezekeka kokusebenza kwethimba. Ukuqonda okwandile kwamakhasimende kuvula amathuba amasha okwakha amacebo ehlukanayo kumakhasimende amahle nalawo angakhokhi kahle. I-ABIL imatasa nokumisela amakhadi ayizinkomba zokuziphatha kulolonke iqoqo ukuze ikwazi ukuhlomulisa amakhasimende amahle – nokuzoholela ekwethembakaleni kwamakhasimende kanye nasekuwagcineni. Amakhadi ayizinkomba zokuziphatha azophinde asize ekwenzeni inqubekelaphambili ekuvuselelweni kwamakhasimende asenkingeni yezimali. 4. Ukuhlola ngokucophelela amathuba okukhula kwamanye amazwe Okwamanje iABIL iyinhlangano yaseNingizimu Afrika, engenawo amanye amabhizinisi ngaphandle kwemingcele yalelizwe. Leli yicebo ebelisetshenziswa ngamabomu; injongo yalo bekungukuba siqale siphumelele kwimakethe yangaphakathi ngaphambi kokuba sicabange ukukhula ngokwendawo. Iqoqo likholwa ngukuthi isikhathi sesikahle ukubhekelela amathuba amabhizinisi ngaphandle kweNingizimu Afrika njengengxenye yecebo lokukhula. Ukungena kwamanye amazwe kwencike ezibonelelweni ezintathu ezingukhiye: Ukuheha ngokomnotho kwemakethe ethizeni; Ukufaneleka, ukuzinza kanye nokusebenza ngokuyikho kwezokulawula komthetho kuleyondawo; kanye Nokukwazi kwe ABIL ukuncintisana ngokuqhubekayo kuleyo makethe. Ekungeneni kwamanye amazwe, iqoqo lizolandela icebo lokukhula elinobungozi obuncane, lihlole ngokucophelela lezo zimakethe, lisebenzisane ngokugcwalisela ebuchwephesheni bendawo futhi lisebenze sakuhlola ukubheka ukuthi yimodeli enjani engasebenza ngokuyikho endaweni ngayinye. 5. Ukwehliswa futhi kwezindleko Ukukwazi ukuqhubekeka nokusebenza kudinga ukuba sibe ngabakhiqizi bezindleko eziphansi kunabobonke ezimakethe esisebenza kuzo. Sesibe nayo inqubekelaphambili ekulinganisaneni izindleko zezinhlaka zethu nezidingo zamakhasimende, kanti indinganiso yethu yezindleko uma ziqhathaniswa nenzuzo, iyehla. Ngaso leso sikhathi nokho, indinganiso yezindleko namafa seyikhuphukele emaphesentini angamashumi amabili. Kwezinye izindawo zebhizinisi yeqoqo – ikakhulukazi ezindlekweni ezimileyo, amanye amathuba okuguqula izindleko asekhona. Iqoqo lizimisele ukulawula izindleko ngokulinganisa kanye nangokungananazi. Ngokokulinganisa, inhloso ngukwehlisa indinganiso yezindleko nenzuzo ibe ngaphansi kwamaphesenti angu-35 bese kuthi indinganiso yezindleko namafa iye emaphesentini angu-17,5 noma ngaphansi. Ngokokungananazi, iABIL izimisele ukulawula izindleko zayo zibe phansi esikhathini eside esizayo, Onyakeni owedlule, sibuyekeze izinhlelo zebhizinisi lethu ukuhlonza nokumisela ukonga nokuvimbela izindleko. Unyaka ozayo uzobona ukuqhubeka kwalokhu, kanjalo nenqubekelaphambili ekwakhiweni kwezinhlelo eziyizo zokulawula izindleko kuzozonke izizinda zebhizinisi lethu. Ngokwengezelela, sizophucula izinhlelo zokuhlola ukusebenza ukwakha isikompilo lokonga esilidingayo. 6. Ukwakhiwa kwesikompilo lokusebenza kulolonke iqoqo Kulonyaka siye sahlola isikompilo kwi-African Bank, sabona amaphuzu amahle namabi alelo sikompilo. Izimfuneko ezinkulu ezabonakala esikweni lokuhlola amabhuku kwafakwa ukuxhumana kombono namasu kubasebenzi ngendlela abaqonda ngayo, ukhuthuthukiswa kwesiko lasemsebenzini eliholela ekukhuleni kokwethembana nokuvulelekelana, ukukhuliswa kwamandla okwenza isimo sokuphatha aphathelene nezezimali nangaphathelene, ukwenza ngcono ukuhlanganisa kanye nokuxhumana ngase zindabeni eziqondene nokwenza ezingeni lumuntu ngamunye kanye nenhlangano. Ngokwemiphumela yalokho kuhlola, i-African Bank Retail isohlelweni lokwakha uhlelo lokuguqula isikompilo, nelizomiselwa ngo-2004. Injongo yokuguqula isikompilo kuzoba ngukubhekelela lezo zindawo ezahlonzwa njengobuthakathaka ngabasebenzi. Akukho kuhlola okwenziwa kwiSpecial Lending. Inhloso ngukwenza lokho kuhlola ngo-2004, bese kubhekelelwa ubuthakathaka obubonakele. Ukuqinisa ibhodi kanye nethimba lokuphatha Njengengxenye yokuzinikelela ekugcineni amazinga aphakeme okuphatha izinkampani ngokuyikho, ibhodi yeABIL, ngo-2002, yamisela ukubuyekezwa okuzimele kwezinhlaka kanye nezinhlelo zeqoqo zokuphathwa kwezinkampani yiWoodburn Mann, ingxenye yenkampani iWhitehead Mann Group plc eBrithani. Ukubuyekeza kwahlanganisa: Ukwakhiwa kwemodeli yokwakheka kwebhodi kanye nokusebenza nekhomba umkhombandlela ophusile iqoqo elizinikele kuwo kanye nezidingo zika King II. Ukuhlolwa kokuhleleka kwamakhono, ulwazi kanye nobuchwepheshe obukhona ebhodini kanye namakomidi ebhodi mayelana nomkhombandlela omiselwe weqoqo kanye 9 African Bank Investments Limited
Page 1 and 2: African Bank Investments Limited AN
Page 3 and 4: 2,5 2,0 1,5 1,0 0,5 0 JSE statistic
Page 5 and 6: Five-year history Four-year compoun
Page 7 and 8: Features 35 30 25 20 15 10 5 0 Head
Page 9 and 10: Focus and strategy The focus of the
Page 11 and 12: Profile African Bank Investments Li
Page 13 and 14: 1994 Formation of investment trust
Page 15 and 16: Performance against key objectives
Page 17 and 18: Short to medium-term objectives OBJ
Page 19 and 20: African Bank Investments Limited We
Page 21 and 22: Letter to stakeholders ABIL believe
Page 23 and 24: Incwadi eya kwabanezabelo iqhutshiw
Page 25: Incwadi eya kwabanezabelo iqhutshiw
Page 35 and 36: Currency adjusted group balance she
Page 37 and 38: Management discussion Overview Key
Page 39 and 40: 12 months ended 12 months ended 30
Page 41 and 42: Capital adequacy model Non-performi
Page 43 and 44: 8 000 7 000 6 000 5 000 4 000 3 000
Page 45 and 46: Sales analysis - number and average
Page 47 and 48: excluding the Saambou PLB acquisiti
Page 49 and 50: The improved credit conditions are
Page 51 and 52: ook and the written-off book. To th
Page 53 and 54: Statement of average balances Weigh
Page 55 and 56: Divisional reports Operationally, A
Page 57 and 58: collection strike rates, which has
Page 59 and 60: ABIL also expanded its portfolio to
Page 61 and 62: Collections business unit. Its most
Page 63 and 64: Issue arising Corrective action req
Page 65 and 66: Skills and experience of the board
Page 67 and 68: Corporate governance continued regu
Page 69 and 70: from the committee responsible for
Page 71 and 72: that the risk policies and strategi
Page 73: Table 1: Remuneration and fees Serv
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Risk review ABIL views risk as an i
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Risk review continued Undesirable r
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Top ten risks Mitigating factors Ri
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Credit risk African Bank Retail Cre
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on a regular basis to ensure proper
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Social commitment Given the nature
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Embarking on a journey The process
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The progress The corporate social c
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Shareholders’ information Number
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agreements, to ensure that the mate
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The interest rate charged is determ
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Continued effort and focus will go
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services of the best employees. The
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The African Bank Foundation accepts
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Index to global reporting initiativ
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Directors’ responsibility The dir
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Directors’ report 30 September 20
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INTEREST OF THE DIRECTORS IN THE SH
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n4 The strike prices of the share o
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Income statement for the year ended
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Cash flow statement for the year en
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Equity accounted income, which is i
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1.9 Revenue recognition Interest in
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Group Company 2003 2002 2003 2002 R
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Group Company 2003 2002 2003 2002 R
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Group Company 2003 2002 2003 2002 R
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111 Group 2003 2002 R000 R000 12. L
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Group Company 2003 2002 2003 2002 R
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Group Company 2003 2002 2003 2002 R
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117 Group 2003 2002 R000 R000 25. R
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Group Company 2003 2002 2003 2002 R
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One to Four to Beyond Non-interest
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One to Four to Beyond Up to one thr
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125 Group 2003 2002 R000 R000 37. O
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Appendix B Investments in associate
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Appendix D Segmental advances and p
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Appendix F Group structure and prof
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3.4.4 ensure that a comprehensive s
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7.4.3 All directors are required to
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6.3 any general payment shall be ma
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13.6 Any repurchases shall comply w
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DIRECTORS’ CURRICULUM VITAES Anto
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6. Isinqumo esejwayelekile esinguno
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12.9.1 kuyokwenziwa ngokulandela uM
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16. Ukuvota nezithunywa Bonke abani
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Form of proxy AFRICAN BANK INVESTME
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Ifomu yokuqoka isithunywa esizokume
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Members of the ABIL board ASHLEY SE
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RAMANI NAIDOO (41) BA LLB Non-execu
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Corporate information COMPANY REGIS
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GRAPHICOR 30006
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