African Bank Holdings Limited and African Bank Limited Quarterly Public Pillar III Disclosures in terms of the Banks Act, Regulation 43 as at 31 December 2016

1

African Bank Holdings Limited and African Bank Limited Quarterly Public Pillar III Disclosures

Executive Summary

  1. Executive summary
  2. Overview

    African Bank Holdings Limited ("ABH" or "the ABH Group") and its 100% held banking subsidiary, African Bank Limited ("ABL" or "the Bank") commenced business on 4 April 2016. ABH was capitalised with a cash subscription for ordinary shares of R 10 billion and, in turn, ABH elected to capitalise ABL with the same amount, also in return for ordinary shares. ABL acquired a portfolio of assets and liabilities from the old African Bank that was placed under curatorship on 10 August 2014 and subsequently renamed Residual Debt Services Limited (in curatorship) ("RDS") ("the Restructuring"). This acquisition comprised the more credit-worthy retail advances book. In terms of the Restructuring, a liability structure was established for ABL whereby the maturities of the funding liabilities acquired from RDS (less a haircut of 10% and a cash pay-out portion of an additional 10%) were effectively extended by three years and eight months.

    The ABH Group published its maiden Annual Financial Statements for the period ended 31 December 2016, as well as the Annual Public Pillar III Disclosures as at 31 December 2016. These documents, which provide detailed insights to the financial performance and position of the ABH Group, are available on the African Bank investor relations website https://www.africanbank.co.za/

    The overall balance sheet of ABL remains strong, with advances well provided for, high capital adequacy and cash holdings of R 11.03 billion. Liquidity risk, interest rate risk and foreign exchange risk are also conservatively managed.

    The overall impact of the strong balance sheet structure, as expressed in the conservative risk appetite, is evidenced in the various sections of this report which, at the African Bank Limited level as at 31 December 2016, include a CET1 ratio of 33.9%, a leverage ratio of 22.3% and a liquidity coverage ratio of 410%.

  3. Capital Adequacy Ratios
  4. 1.2. Capital Adequacy Ratios (continued) Total 38.37

    5.68

    The capital adequacy ratios and qualifying regulatory capital for African Bank Holdings Limited and African Bank Limited as at 31 December 2016 are set out in the graph and table below. The Group remains well capitalised with CET1 and Tier 1 ratios of 32.7% and 33.9% at a consolidated Group and Bank level respectively. The corresponding total capital adequacy ratios are 38.4% and 41.0% respectively for the Group and Bank respectively. The increase in the capital adequacy ratios from the prior reporting period is primarily driven by the impact of the liability management exercise, reflected in a lower credit risk weighted assets requirement for wholesale deposits as a result of lower cash holdings. Due to the effect of the prescribed calculation methodology, this impact was not fully present in the prior reporting period.

    CAPITAL ADEQUACY BY TIER (%)

    CET1 AT1 T2

    Total 40.98

    7.12

    32.70

    33.85

    Total 10.375

    2.2500

    1.2500

    Total 11.5000

    2.2500

    1.7500

    6.8750

    7.5000

    AFRICAN BANK

    HOLDINGS L IMITED

    AFRICAN BANK

    L IMITED

    2016 BASEL 3 - SA 2019 BASEL 3 - SA

    MINIMUM MINIMUM

African Bank Investments Ltd. published this content on 15 March 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 15 March 2017 14:05:14 UTC.

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