Dudu Ramela: The African Bank Group today released its six-month financial results ending March 31, 2022 Post-tax net profit rose 145% to R372 million The group said it intends to diversify its fund base targeting retail savings deposits, from R8.6 billion to R11 billion, an increase of 27%. This includes R1 billion deposits from the transactional MyWORLD account.
Kennedy Bungen is the CEO of African Bank, and he joined us to talk about the group’s performance. Thank you so much, sir, for making yourself available this evening. How would you characterize the results?
Kennedy Bungen: Thank you for my stay. It’s always a pleasure to talk to your audience. These half-year results have been really encouraging news, giving us confidence that our accelerated strategy of creating scale, diversity and sustainability in African banks is indeed on the right track. We are delighted with all the numbers that have come out at this time, and we are excited to transform this bank into a truly ‘bank for the people, by the people, in the service of the people’.
Dudu Ramela: Let’s take a look at what has grown. You’ve experienced a healthy increase in MyWORLD transactional banking offers. Talk to us through the numbers there.
Kennedy Bungen: This is a really big story for us. We’ve increased myWORLD bank account by more than 76%. We have almost doubled the balance in MyWORLD. Let’s go into a little more detail about why this is important to us – when we came up with this new strategy last year to transform African Bank from a monoline microlending organization into a fully retail and commercial bank. The biggest challenge was how we were going to move our customers to trust us with their transactional services.
So we’ve spent a lot of time working in our teams, co-selling them, and creating our winning digital omni MyWORLD channel, aligning with our sales transformation strategic theme so that our customers can take it. They have voted on their feet and are helping to diversify our revenue base from just interest income to non-interest income and turn it into a full-fledged retail bank from just one lender.
Dudu Ramela: Kennedy highlights the proceeds from the disbursement of bank loans. What does that mean?
Kennedy Bungen: It really speaks to the core issue that our bank has always been good at, which is lending. To build a customer-centric digital- and data-enabled business we were very clear about it being diverse, measurable, sustainable, and not losing the core of what we do today. We must continue to win when it comes to lending.
Now, over the past two years at Covid we’ve become quite shy about supporting our customers, and we’re now fortunate that with the improvement of the macroeconomic space we’ve been able to open the taps a bit and push ourselves back to support. Our customers. This is a historically high level of credit sales at African banks, and I think it speaks volumes about the direction of our journey and how we are building a new bank here. So we’re pretty trivial about the rise of credit sales, as much as we are [are] With the improvement of our transactional banking accounts.
Dudu Ramela: You are talking about being a customer centric bank. How important is it for the group to move towards the customer-development journey in the 2021 South Africa Consumer Satisfaction Index announced in March this year? You have overall leadership positions in six of the nine measured divisions.
Kennedy Bungen: We really need to take this time to thank our millions of customers who voted for us in six of the nine categories you mentioned. This is something we jealous of African banks – to continue to be number one overall in customer service. That means we’re doing something right. We are jealous of this position because we want a bank with a special history, founded in 1964 in Soweto, Orlando High, black businessmen and women across the country who wanted a bank of their own, a bank that feels like their own. Got a close friendship with them, which they understand, a bank for them.
Nearly 50 years later, with all our highs and lows, when our customers go out and say, yes, this is the African bank that satisfies us the most, it boosts our confidence.
It says they are here with us, they are walking with us as we cross – not just from being a small lender, but to becoming a full-fledged retail and commercial bank. We know our customers have found us.
Dudu Ramela: That transformation – how important is an integrated digitization process as you move forward?
Kennedy Bungen: Well, it’s an integral part. This transition is to ensure that we place digitization so that we can transfer the pain points of customers who are still interacting with us through our customers, through branches or call centers, or through smartphones or laptops.
We have invested heavily in the last six months. In fact, more than 145 of our new African bankers have joined us, bringing with them some extremely rare and much-needed digital analytics capabilities to provide an instructive and descriptive understanding of how our customers can experience our experiences and how we can automate them. Enables us. Pain points and make sure we get our processes right so that our customers see the difference in our experience on a daily basis.
I estimate that the 76% improvement in MyWORLD transaction accounts speaks to the improvement I have mentioned that has begun to bear fruit on that journey.
Dudu Ramela: That’s right. What about the journey that African Bank has embarked on to create a complete middle-of-the-pyramid business banking offer? We understand that it is in the final stages of development.
Kennedy Bungen: Of course. I hope we will be able to talk about this [near] The future we have is very clear that the days of a bank founded by businessmen and women that no longer bank them and is just a retail bank are over. We’ve identified an underdeveloped set of entrepreneurs, businesses that are adjusting that pyramid needle in terms of business-banking customers.
Our competitors and big banks in this market are really very good at serving your big corporate, your medium enterprises with turnover above R500 Million. But once you start to go below R250 million a year, to your entrepreneurs – a doctor who runs a clinic there, sole proprietorship, or emerging businesses – although solutions are still not enough for them, we think it’s an opportunity to meet us, and We are working on both a business-banking offer and also a rail establishment [the] Digital SME offer that will help us meet this demand in today’s market.
Dudu Ramela: Fair enough. You talked to us about the rich history of the bank, I guess. Looking forward to the future, what does it hold?
Kennedy Bungen: We believe that our heritage is not just a thing of the past. This is the story of the African bank [as to] How, and for whom it was founded, [and] Our inspiration is to imagine the future of a bank for the people, by the people, to serve the people. It’s a story that inspires the kind of six months we’re reporting [on] In terms of performance today, because we are reminded that deep in our DNA it is a bank that has always been meant to be different in how it looks at communities, how it looks at our people and how it looks at families and entrepreneurs.
We put unique solutions on the table to differentiate us from how we interact with our customers or our community and then we continue to grow with them. We’re really lucky today that we’ve got the balance sheets, we’ve got the capital, we’ve got the liquidity, we’ve got the people, and we’ve always had a plan – a bank for the people.
Dudu Ramela: Kennedy, congratulations. We look forward to hearing from you soon on the program here. Kennedy Bungen is the CEO of African Bank.