ABIL quarterly trading update looking good.

African Bank released their first quarter trading update this morning. And you know what, it is going to be well received. Here goes a copy and paste on credit sales across the platform. AHL is Ellerines and segregated as such: "Combined credit sales ... increased by 59% to R5,5 billion (Q1 2010: R3,5 billion). African Bank credit sales grew by 63% to R4,3 billion, while total credit sales at EHL increased by 29% to R1,2 billion, the latter supported by a growing contribution from personal loans."

And how was all of this achieved? "The growth in African Bank originated sales was achieved through a 26% increase in the volume of new loans granted, particularly to lower risk segments, and a 29% higher average loan size of R9 800. Average loan term increased from 39 months to 44 months." So the new loans are getting larger and longer in duration. And remember one thing, this is traditionally the strongest quarter of the year.

And encouraging signs that the consumer is past the worst:
"Asset quality continued to improve, as evidenced by vintages that are down from the peak levels of the quarter ending 31 December 2008. Non-performing loans (NPLs) as a percentage of advances declined modestly on the back of the faster growth in performing loans. NPL coverage was steady."

The stock is up just shy of one and a half percent this morning, I guess the market participants are telling you that they are cheering this news, but not too loudly. We continue to like and buy the stock at these levels. The sector is attractive (consumer finance) and the company is well placed. The analyst community suggests nearly 300 cents worth of earnings for this year, and a dividend of around 210 cents. Meaning at current levels the stock yields over five and a half percent.