ADC's associate, BancABC reports very strong half-year results
ADC African Development Corporation GmbH & Co. KGaA ('ADC'), ISIN DE000A1E8NW9, a fast growing pan-African banking group focused on the frontier markets of sub-Saharan Africa, is pleased to announce that its 50.4% owned associate BancABC achieved strong results for the half-year ended 30 June 2012. The results were largely driven by significant growth in income on the back of the expansion of retail banking. Pre-tax profits grew to BWP 96 million (EUR 9.8 million), 53% up on the comparative period in 2011. Attributable profit of BWP 56 million (EUR 5.7 million) was 49% above prior year results, leading to a return on equity of 17.8%.
Total income for the period increased by 53% compared to the period last year to BWP 476 million (EUR 48.7 million) with growth being recorded in all major income lines. BancABC's retail network grew to 55 branches, up from 35 at the end of June 2011, with parallel growth in total retail customer numbers by 144% to 155,763 customers at the end of June 2012.
Total costs at BWP 379 million (EUR 38.8 million) were 55% higher than recorded in the comparative period in 2011 largely due to the expansion of its retail banking business. Notwithstanding a current cost to income ratio of 75% due to the retail banking rollout, the group is still confident that the target of 50% should be achievable in the next few years.
The group's balance sheet grew by 18% to BWP 10.8 billion (EUR 1.1 billion) compared to December 2011 and by 47% since June 2011. Total equity moved positively by 9% to BWP 666 million (EUR 68.2 million) compared to December 2011 and by 42% in relation to June 2011. Loans and advances show healthy growth of 29% to BWP 7.8 billion (EUR 0.8 billion) since December 2011 and of 95% since June 2011, largely on the back of strong growth in Botswana's performance. Simultaneously non-performing loans have been reduced to 5.4% with a reduction of the credit loss ratio to 0.8%. Deposits increased by 19% since year-end 2011 to BWP 8.8 billion (EUR 0.9 billion) at the end of June 2012 and by 46% since June 2011.
The operational performance of the five banking subsidiaries in the Southern African Development Community was overall excellent with growing year-on-year profits in Botswana (+228%), Mozambique (+77%), Zambia (+174%) and Zimbabwe (+30%). The only exception had been Tanzania, which posted a loss of BWP 5 million (EUR 0.5 million) (-149%). This was due to a reduction in net interest margins owing to a significant increase in deposit rates at the end of 2011 and the beginning of 2012. The higher cost of money could not be entirely passed on to the borrowers.
BancABC has just successfully completed a USD 50 million rights issue, mainly taken up by ADC. The capital raised will be deployed to banking subsidiaries for their capitalization. Following the capital raise, all banking subsidiaries of BancABC will either be in the top tier or upper second tier of banks in the respective countries that the group operates in. Looking ahead, Douglas Munatsi, CEO of BancABC said the group was well-placed to continue on its growth path. 'The additional capital that we have raised should ensure that the improved performance should be sustained.'
In line with the group's dividend policy, an interim dividend of 8 Thebe (about USD 0.01) per share is being proposed. This will be paid on 21 September 2012 to shareholders on the register on 7 September 2012. Due to its most recent acquisition of 50.4% in BancABC, ADC will therefore be granted a dividend of approximately above USD 1.0 million.
Dirk Harbecke, ADC's CEO, commented on the encouraging results: 'The presented results underline our recent decision to take a majority stake in BancABC and make it our key banking operation in Southern and East Africa. ADC intends to consolidate BancABC with consolidated financial statements presented latest at year-end 2012. Therefore, all BancABC core numbers will be reflected in ADC's balance sheet. We are particularly pleased that the performance was driven predominantly by an increase in net interest income from the expanding consumer lending segment, showing good progress in the retail banking rollout. The BancABC management team has our full confidence and already contributes significantly to the success of ADC, also proven by the steadily growing dividend stream that we are receiving from BancABC.'
BancABC is the banking brand name of ABC Holdings Limited, a company registered in Botswana, which has a primary listing on the Botswana Stock Exchange and a secondary listing on the Zimbabwe Stock Exchange. BancABC is a regional bank with operations in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe and has a group services office located in Johannesburg, South Africa. Historically, BancABC was a merchant bank offering a diverse range of services. These included wealth management, corporate banking, treasury services, leasing, asset management and stock broking. BancABC recently expanded into the retail space. BancABC's vision is to become Africa's preferred banking partner by offering world-class financial solutions. For information, please visit www.bancabc.com
ADC African Development Corporation ('ADC') (ISIN: DE000A1E8NW9; Bloomberg: AZC.GR, www.african-development.com), a member of the Angermayer, Brumm & Lange Group (www.abl-group.de), was established in September 2007 and is on its way to become one of the leading banking groups in sub-Saharan Africa, active in corporate and retail banking and proprietary investments. The company's success is primarily due to its local management team, which follows international best practice principles to further develop its operational companies, and implements international best practice processes to increase their profitability. ADC was amongst the first international emerging market investors to be integrated into the insurance solution offered by the Multilateral Investment Guarantee Agency ('MIGA'), a member of the World Bank Group, primarily due to its strong operational approach and adherence to the highest ethical standards. This insurance offers protection against a variety of political risks, in particular the risk of radical political change.
ADC African Development Corporation
Telefon: +49 69 719 12 80 119
Telefax: +49 69 719 12 80-089
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