African Bank delays JSE listing

African Bank Group, the holding company of African Bank and African Insurance Group, has postponed its JSE listing plans for 2025 by two or even three years, it noted on Tuesday at its annual results presentation.

Speaking to Moneyweb after the filing of the group’s FY2024 results, group CFO Anbann Chetti said recent acquisitions have required the integration of systems, people, and processes.

As part of its diversification strategy, the group acquired UBank in December 2022, Grindrod Bank in 2023 and, more recently, Sasfin Bank’s capital equipment finance and commercial property finance businesses.

“We said, let’s give ourselves another two to three years before we do the traditional listing. When we list, we want to be a stock that is well traded with a lot of liquidity,” he notes.

IPO preparations continue

In the meantime, the group is continuing with its preparations for an initial public offering (IPO). This includes the African Bank employee share ownership scheme – iKamva Lethu (Our Future) – approved by shareholders in March 2024.

From the current financial year through to FY2026 and FY2027, the group will consider “management schemes” by partnering with the Public Investment Corporation (PIC) and the Government Employees Pension Fund (GEPF) as its anchor shareholders to look at ways of getting shares “in the hands of the public,” he adds.

(Besides the South African Reserve Bank, which currently has a 50% stake in the African Bank Group, the GEPF is its most significant shareholder with a 25% stake; the balance is held by a consortium of South African banks – FirstRand, Standard Bank, Absa, Nedbank, Investec and Capitec.)

“By the time we go to market [in FY2027 or FY2028], the overhang of the BEE [black economic empowerment] share will be in the right hands. Then we’ll do the traditional IPO so that at that stage, there won’t be further dilution for the new shareholders coming in,” Chetti notes.

He says the group will consider BEE partners who align with African Bank’s strategic aim and have the required equity and capital to contribute.

Targets and plans

Chetti says that moving out of the proposed listing will allow the group to reach its “audacious” targets over the next three years.

“We are targeting earnings of R2.5 billion which we believe will be coming through client growth and the right macroeconomic conditions.”

The group achieved a net profit after tax of R523 million for the 12 months to 30 September 2024.

In FY2025, African Bank plans to extend its current funeral and credit life insurance offering to a product that will service its business and commercial unit as well as a possible “simple life insurance product”.

Further into the future, more products, such as household, car, and business insurance, will follow. “We want to go slow and introduce the right products to the market at the right time,” Chetti says.

Listen to Jimmy Moyaha’s interview with African Bank CEO Kennedy Bungane in this SAfm Market Update with Moneyweb podcast: