Poll

I will Buy African Bank Shares @

Below R8
0 (0%)
Below R7
2 (8.3%)
Below R6
13 (54.2%)
Are you Mad !!
4 (16.7%)
Never
5 (20.8%)

Total Members Voted: 23

Author Topic: African Bank  (Read 44737 times)

AVM

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African Bank
« on: October 28, 2013, 10:33:54 am »
How low can they go? :wtf:
Quote
To date, companies announced steady results, except for African Bank [JSE: ABL] that warned investors that their earnings will show a drop of around 90% in the current 12 months when the company announce their results in a few weeks' time.

The culprit is much higher provisions for bad debt on their largely unsecured lending book.
http://www.fin24.com/Markets/Equities/JSE-What-to-watch-this-week-20131027

jaDEB

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Re: African Bank
« Reply #1 on: October 28, 2013, 11:54:04 am »
 ???
jaDEB

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Moneypenny

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Re: African Bank
« Reply #2 on: October 29, 2013, 08:22:52 am »
Consensus has changed to 'buy' 25/10 on ABL.

jaDEB

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Re: African Bank
« Reply #3 on: November 11, 2013, 09:38:04 am »
 >:(

Is there money to be made here ?

jaDEB

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Aragorn

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Re: African Bank
« Reply #4 on: November 11, 2013, 10:26:55 am »
>:(

Is there money to be made here ?
There's a rights issue coming up allowing shareholders to buy additional shares at R8.00. I believe that this will have a negative effect on the price, bringing it down to between R12.50 / R13.50. But hey! If you hold the shares already and then participate in the issue, you'd be averaging down along with the price anyway. Otherwise, wait until after the rights issue, then buy at a lower price.
Long term though - not my kettle of fish (excuse the pun).
Not idly do the leaves of Lorien fall.

jaDEB

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Re: African Bank
« Reply #5 on: November 11, 2013, 12:49:51 pm »
Thanks .... ... ...  :TU:
jaDEB

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Bundu

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Re: African Bank
« Reply #6 on: November 11, 2013, 02:00:32 pm »
price dropped so much today, because the shares are now trading ex-entitlement of the rights offer

AFAIK the rights offer closes on 29Nov - so how will this be handled in this game? It would be unfair if we were expected to hold reserves in order to participate in the rights offer - Can we perhaps get our December funds on 29Nov or sell our rights?

EDIT: I see now that the rights offer shares are traded 1st week of December, so that should be OK
« Last Edit: November 11, 2013, 02:20:34 pm by Bundu »
« Last Edit: Tomorrow at 06:13:55 PM by Bundu »

jaDEB

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Re: African Bank
« Reply #7 on: March 24, 2014, 12:43:50 pm »
 ???  :'(
jaDEB

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jaDEB

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Re: African Bank
« Reply #8 on: May 02, 2014, 09:34:33 am »
TRADING STATEMENT AND RELATED INFORMATION

In terms of the JSE Limited Listing Requirements ("Listings Requirements"), companies are obliged to publish
a trading statement as soon as they are satisfied that a reasonable degree of certainty exists that the financial
results for the period to be reported upon next will differ by at least 20% from the financial results for the
previous corresponding period.

Accordingly, shareholders of ABIL are advised that, for the six months ended 31 March 2014, the Company
expects a headline loss of between R3,1 billion and R3,3 billion relative to the R604 million restated headline
earnings for the equivalent six months to 31 March 2013 and the headline loss per share is expected to be
between 239 cents and 254 cents relative to the comparable restated headline earnings of 62,3 cents per
share. The basic loss is expected to be between R4,3 billion and R4,5 billion in relation to the R602 million
restated basic earnings for the comparative period. The basic loss per share is expected to be between 331
cents and 347 cents per share compared to the restated basic earnings of 62,1 cents per share for the
comparative period.

The operating environment continues to be challenging, with consumers remaining under financial pressure.
The loans business written up to the end of June 2013 ("pre July 2013 business") continues to produce an
elevated level of non-performing loans ("NPLs") each month whilst the business written post June 2013
shows the expected level of reduction in credit risk due to the stricter underwriting interventions implemented
in July 2013. Consumer spending on furniture and appliances remains very subdued.

Banking Unit
The Banking unit is expected to show a headline loss of between R1,9 billion and R2,0 billion due to:

    -   An increase in specific provisions of approximately R600 million driven by the following factors:

            o   NPL emergence on business written pre July 2013 being at higher than anticipated levels.
                The total NPL formation in this reporting period was approximately R6 billion, which was
                about R600 million more than the level anticipated; and

            o   An increase in specific provision coverage on NPLs of over 1% from 30 September 2013 to
                31 March 2014. This is due to seasonal factors that impacted collections and a continued
                challenging collections environment.

    -   A decision to significantly increase the general provision for credit impairment relating to the
        performing loans ("PLs") by approximately R2,5 billion.

Although the expected slowdown in NPL formation is evident, this decline is taking longer than originally
anticipated. More than 25% of the NPL's that emerged in each of the first three months of this period came
from business written in the last quarter of the 2012 calendar year, which was impacted by particularly high
volumes and poor quality. This emergence of NPLs has since reduced to an average of approximately 15%
in the second three months of this period. It is expected that the emergence of NPLs from the last quarter of
2012 will gradually fall further in the months ahead. Vintages on business written in the period post June
2013 reflect improvement in credit risk which is evident from the loans that have missed two instalments to
the end of March 2014 after three months on book being at 1.9% versus the equivalent of 2.8% at March
2013.

In light of the elevated level of NPLs emerging from the pre July 2013 business, a decision has been taken to
significantly increase the general provision on PLs that are anticipated to become NPLs in the next six
months and beyond. This general provision will be transferred to the specific impairment provision as and
when the expected higher than normal level of NPLs from the pre July 2013 business emerges. This action
is being taken to prevent future results from continuing to be adversely affected by the higher level of
emergence of NPLs from the pre July 2013 business. The benefit of taking this step of accelerating the
provision for future credit risk NPL emergence positions the business for an earlier recovery.

Excluding the impact of the increased impairment charge of approximately R3,1 billion, normalised headline
earnings for the Banking Unit would have been between R232 million and R332 million, in relation the
comparative period restated headline earnings of R604 million.


Retail Unit
The Retail Unit headline loss is expected to be between R1,2 billion and R1,3 billion for the six months to
March 2014 in relation to the nominal profit for the corresponding period. Trading conditions in the furniture
industry continued to deteriorate during the period, as both the willingness and ability of consumers to spend
came under further pressure. This unit continues to be negatively impacted by African Bank’s stricter
underwriting criteria. Efforts to further reduce costs and maintain firm margins did not sufficiently counter the
decline in merchandise sales. The loss was exacerbated by the deferred tax adjustment. In light of the
operating losses, a decision has been taken to cease raising any further deferred tax on these losses which
would have been a credit to headline earnings of approximately R180 million and to impair the deferred tax
asset held at 30 September 2013 of R723 million. This asset will only be recognised in the future once the
business starts to generate an operating profit.

Excluding the effect of these adjustments the retail unit would have generated a headline loss of between
R300 million and R400 million in relation to the comparative restated headline earnings of R4 million.

In addition, the following two items which do not impact headline earnings, do affect basic earnings:

         -   Given the trading environment, a decision has been taken to write off the residual goodwill
             attributable to the retail unit of R831 million, which includes R115 million held at the group level.
             
         -   Trademarks which are no longer expected to be utilised amounting to approximately R600
             million were impaired.

ABIL continues to work towards the disposal of Ellerines, but in the interim is also focussed on returning it to
profitability.

Capital Adequacy
The group and Bank’s capital adequacy ratios had initially improved significantly as a result of the rights
issue, but has since been impacted by this set of results. The board has implemented certain measures to
preserve and increase capital through both operational and strategic initiatives and is pursuing additional
measures. The write down of the deferred tax asset, trademarks and the goodwill in the Retail unit has no
impact on regulatory capital as these items were already deducted from capital

Liquidity and Funding
African Bank continues to adopt a conservative stance to its asset and liability management policies. Given
the lower sales volumes as a result of both the lower demand for credit and ABIL’s stricter credit underwriting
criteria introduced in June 2013, cash collections from the debtors book continue to exceed cash
disbursements on new loans by approximately R1 billion a month. As at 31 March 2014, the bank had
approximately R5 billion in cash balances.

Dividend policy
In light of the forecast interim results as discussed above, the board has decided that no interim dividend will
be declared in 2014. Further details on the dividend policy going forward will be provided with the release of
the final results on or about 17 November 2014.


The forecast financial information, on which this trading statement is based, has not been reviewed nor
audited and reported on by the Company’s auditors.

ABIL’s results for the six months ended 31 March 2014 are expected to be released on SENS and RNS on
or about Monday, 19 May 2014. The Company is in a closed period and will therefore engage with
shareholders from 19 May 2014 to explain fully the results for the period.

ABIL will be holding a conference call with investors and analysts at 16:00 SA time, on Monday 5 May 2014.
Given that ABIL is in a closed period, no questions will be taken from participants on the conference call.

Conference call                          Access numbers for participants dialling from their country:

Live call                                48 hour playback                  Code 28767#
South Africa & Other                     South Africa & Other
Toll 011 535 3600                        011 305 2030

USA                                      USA
Toll free 1 855 481 5362                 1 855 481 5363

UK                                       UK
Toll free 0 808 162 4061                 0 808 234 6771


On behalf of the board

Midrand
2 May 2014
jaDEB

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Patrick

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Re: African Bank
« Reply #9 on: May 02, 2014, 12:21:42 pm »
Down nearly 13% today, and I have a feeling it hasn't bottomed out yet...

jaDEB

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Re: African Bank
« Reply #10 on: May 02, 2014, 12:50:07 pm »
Down nearly 13% today, and I have a feeling it hasn't bottomed out yet...

Agree, thanks goodness I am at work today ..  8) If on leave I never would have seen the move
jaDEB

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jaDEB

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Re: African Bank
« Reply #11 on: May 19, 2014, 07:59:43 am »
OK, so when it hits R3.00 we can buy it at half the NAV. Sounds like a plan.

Financial features for the six months ended 31 March 2014

- Headline loss of R3,1 billion ( 1H13: restated earnings of R 604 million)
- HEPS loss of 240,7 cents (1H13: restated earnings of 62,3 cents)
- Basic loss of R4,4 billion (1H13: earnings R602 million)
- Basic loss per share of 337,6 cents (1H13: earnings 62,1 cents)
- Banking unit gross advances grew by 5% to R61,6 billion (1H13: R58,8 billion)
- Income from operations increased by 1% to R10,9 billion (1H13: R10,8 billion)
- Ordinary dividends per share of 0 cents (1H13: 25 cents)
- Net asset value (NAV) per share attributable to ordinary shareholders decreased by 62% to 635 cents (1H13: restated 1 653 cents)
- Tangible net asset value (NAV) per share attributable to ordinary shareholders decreased by 28% to 623 cents (1H13: restated 870 cents)
- Return on equity of negative 54,6% (1H13: restated positive 9,1%)
jaDEB

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Neil

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Re: African Bank
« Reply #12 on: May 19, 2014, 08:06:56 am »
One word comes to mind when describing those results: "Disastrous"
Disclaimer:The views/opinions expressed in this post are that of the writer and are not to be interpreted as advice, nor as a indication to buy/sell any investment or equity. The writer will not be held liable for any profit or loss resulting from reading of this post by the reader in any form.

jaDEB

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Re: African Bank
« Reply #13 on: May 19, 2014, 08:43:20 am »
Agree 100%
jaDEB

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Patrick

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Re: African Bank
« Reply #14 on: May 19, 2014, 04:44:39 pm »
Your timing was great on this one jaDEB.