African Bank reported a full-year loss a day after announcing the unexpected resignation of Basani Maluleke, the only Black women to lead one of South Africa’s top banks.
The unsecured lender swung to a R560 million ($37 million) loss in the 12 months through September, compared with a year-earlier profit of R267 million, Johannesburg-based African Bank said in a statement Tuesday. The coronavirus pandemic and the nation’s moribund economy caused credit impairments to soar 58%, resulting in a credit-loss ratio of 11.7% from 7.5% previously, it said.
“Unfortunately, our financial numbers have not withstood the worsened economic climate and the overlay of the effects of the Covid-19 pandemic,” Maluleke said in the statement. The second half of the year saw “signs of reduced risk and improved earnings.”
The chief executive officer is leaving at the end of April after three years in the top post to pursue other career opportunities, African Bank said on Monday. Maluleke took over after the South African central bank and six of the nation’s largest lenders stepped in to save the firm with an equity injection when African Bank Investments Ltd. went into administration in 2014.
South Africa’s central bank has appointed financial advisers to assist the lenders exit their shareholding, African Bank said.
“The bank has started working with these advisers and the South African Reserve Bank anticipates that their exit will be completed within 18 to 24 months, after the identification of a suitable buyer,” the lender said.
The bank has 1.35 million customers and largely caters to low-income clients. Under Maluleke, African Bank has managed to boost deposits, giving it access to a cheaper source of funding and transaction fees, while also increasing the cross-sale of products, such as insurance, to diversify away from only providing small loans.
Chief Financial Officer Gustav Raubenheimer, who was also instrumental in the rescue process of African Bank, will take over as acting CEO. South Africa’s financial sector leadership ranks have been dominated by White men. The only other woman besides Maluleke to have led a bank as CEO is Maria Ramos, who was at the helm of Absa Group Ltd. for a decade until February 2019.