The company also said it had realised a basic loss of 4.4 billion rand relative to the 602 million rand restated basic earnings for the comparative period.
(WATCH VIDEO: African Bank investments limited shares down 26%)
The [DATA ABL:African Bank Investments Limited] also saw a headline loss per share of 240 cents in 2014 compared to headline earnings of 62 cents per share in 2013.
An economic loss of 4 billion rand was reported in 2014 against the relative economic loss of 355 million rand for the equivalent six months to 31 March 2013.
“The banking unit was negatively impacted by lower disbursements and advances growth, a slight decrease in yield as a result of increased non-performing loans, as well as deteriorating asset quality with commensurate significantly higher credit impairment charges,” the company added.
However, the company noted that the successful conclusion of the rights issue during December 2013 had strengthened the balance sheet from a capital and liquidity perspective.
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African Bank’s losses were also necessitated by the negative performance of the economy affecting consumers’ ability to meet commitments.
“The South African economy continues to experience difficult conditions, with downward revisions in gross domestic product, increasing inflation trends signalling probable interest rate increases.”
The banking group says this will continue to have a negative impact on consumer confidence and their ability to meet their financial commitments.
The company reduced the granting of new loans to riskier customer segments during 2013 consequently leading to the reduction and re-pricing of new business within the riskier segments of its customer base.
“The group believes that the steps taken to restore the yield/risk relationship will result in improved profitability of the business over the medium to longer term, in the expected tough economic climate, barring a further deterioration in the environment.”
BY TRUST MATSILELE