The lender will compete with a number of new digital banks as it expands its customer base to income include more middle-income clients.
African Bank plans to more than double its customer numbers over the next three years as it widens its target market and adds more products. However, the bank will be competing with a number of other digital banks entering the market.
Releasing full-year results today, African Bank said it aimed to have more than 2.5 million customers by 2021 from 1.05 million at the end of September. It was preparing for the customer launch of its My World account, which would be added to its omni-channel platform. Earlier this month, Discovery put its Discovery Bank into beta testing with staff before opening for customers next year. Other banks entering the digital space include Patrice Motsepe’s Tyme Digital and Bank Zero, co-founded by former FNB CEO Michael Jordan.
The bank has targeted lower-risk customers and has made a deliberate effort to broaden its customer base to include more middle-income clients as it goes head-to-head with the country’s larger lenders in transactional banking. It said the My World account would have the lowest banking fees in SA, the best interest rates for savings and a fully digital account opening process.
The bank reported a 21% rise in credit disbursements for the year to end-September as it expanded its customer base. Savings and investments with the bank more than tripled to R1.11 billion from a year earlier. Operating profit increased by 10.6% to R1.45 billion and its return on equity improved to 10.6%.
“We are excited about the journey ahead to become a digital bank enhancing our customers’ lives,” CEO Basani Maluleke said in a statement. ”We look forward to continuing this journey with our customers, our employees, and indeed all our stakeholders as we face a challenging and dynamic future.”