African Bank to offer limited service from next month

Posted by News Express | 20 March 2016 | 3,102 times

Gmail icon

African Bank’s “good bank” would still offer its lending, insurance and investment products when it launches next month, designate CEO Brian Riley said on Thursday.

The full-service retail bank, which will extend its offering to transactional banking, is expected to launch only in the third quarter of next year.

Mr Riley said the bank — which has been in curatorship for nearly two years after reckless lending triggered by a collapse of parent company African Bank Investments Limited (Abil) — did not yet have the platform needed to offer transactional banking services.

“We have no system yet,” he said, following a media briefing on its strategy for the retail bank. “(Transactional banking) requires different skillsets.”

The bank was training employees, hiring new ones, and was scouting for a transactional banking platform, he said.

It would present its transactional banking plans to the board in May.

Mr Riley said the bank was launching a “proof of concept” with insurer Sanlam at the end of this month for financial planning and investment products.

This would be reviewed after six months to determine if the project could diversify its customers and products. For Sanlam, the project was a way to test the value of offering its products and financial solutions through the bank’s 395 branches across the country. Sanlam was looking to expand its distribution, he said.

In May and June, it will launch funeral insurance as part of its partnership with insurer Guardrisk.

The partnership has netted 85,000 new credit life customers since the bank stopped doing business with Abil’s Standard General Insurance Company in January.

The bank will launch a stokvel product by September. It will also relaunch some of its offerings with new functionalities later this year and next year.

Mr Riley said the bank had not yet determined what interest rates it would offer.

Adrian Cloete, an analyst at PSG Wealth, said the bank faced stiff competition, which would make differentiation difficult.

“The important thing was that African Bank wasn’t allowed to fail, that customers still have confidence, that funders will continue to fund the bank, and that SA’s overall banking system demonstrated once again how sound and resilient it is.”


Source: News Express

Readers Comments

0 comment(s)

No comments yet. Be the first to post comment.

You may also like...