African Bank, our preferred financial stock released results for the six months to March 2010. Headline earnings at 914 million Rands, per share slightly lower at 113.7 cents per share. The ordinary dividend has been maintained at 85 cents per share. Ellerines making progress, their integration into the existing business expected to be completed by the end of the year. Remember that 2009 was an exceptionally tough year for everyone globally.
Funding is key for the group, as per the announcement: "ABIL maintained its conservative approach to capital management during this period, which ensured stable credit ratings for the bank, a steady flow of available funding and a reduction in the cost of funding as the relatively elevated risk premiums of 2009 returned to more normalised levels."
And the future is most certainly looking brighter: "Whilst trading conditions are not expected to show any material improvement in the short term, the group expects a stronger performance for the full year, given the better sales momentum evident in recent months, the expectation of lower bad debt charges as previously higher vintages work their way through, and the benefits of the various cost savings initiatives recently implemented." We will have a longer look at these and then report back to clients in due course.