Interim Report

Commentary on the unaudited results for the period ended 30 June 2018

Group position
12-month performance

The bank continued to improve its liquidity position as growth in its deposit-taking activities over the past 12 months increased by R589,7 million, or 12,2%, since June 2017.

With the growth in deposits, surplus cash, which is invested in Shariah-compliant equity finance has increased by R125,9 million, or 16,4%. Cash and cash equivalents also increased by R53,7 million, or 47,8%, for the 12-month period since June 2017, which was primarily due to the timing of funds received during this period. During this period, the bank also saw favourable growth in its advances book, which equated to R509,9 million, or 12,1%.

Six-month performance
The deposit book growth for the six months ended 30 June 2018 has also been favourable, with growth of R330,9 million, or 6,5%, to the end of June 2018, while advances grew by R71,9 million, or 1,5%, for the same period.

With the encouraging growth in deposits that took place for the year, these excess funds were then invested in equity finance transactions for the year, which resulted in significant growth of R446, 1 million, or 99,3%, in the current year. The additional equity finance transactions were funded by both the increase in the deposit-taking activities and a reduction in cash holdings for 2018, which equated to a reduction of R80,5 million, or 32,7%, since December 2017.

The bank also continued to manage its capital requirements with the issuance of its local denominated Sukuk which, as at the end of June 2018, totalled R125 million. This is an increase of R80 million, which is very pleasing in terms of the bank’s target of R200 million. This contributed to an increase of 86% in the income paid to Sukuk holders during this period.

Group performance
Income from advances and equity finance increased by R19,4 million, or 8,2%, compared against the same period last year. After sharing with depositors and accounting for credit impairments, net income from funding income activities increased by R12,3 million, or 10,5%. Foreign exchange income, together with income earned from unit trust sales, electronic banking fees and other fee income, contributed to an increase in non-funding income by R2,8 million, or 12,9%, when compared against the same period last year. The reduction of the impairment provision to R304 000 is as a result of the IFRS 9 adjustment in January 2018.

Operating expenditure increased by R16,5 million, or 16,7%, year-on-year, driven mainly by higher employment costs and additional depreciation as a result of new capital Projects implemented during the preceding 12 months. After consideration of the above, the net effect is a decrease of 5,8% in total comprehensive income in 2018 compared against the same period in 2017. This, then, resulted in basic and diluted earnings per share also decreasing by 5,8% for the same period.

As may be seen from the results, the macro and micro-economic challenges facing the country have had a negative impact on the bank’s performance for the six months ended 30 June 2018.

Additional disclosure requirements in terms of regulation 43 of the Banks Act may be accessed via the bank’s website,, when published in line with regulations.

For and on behalf of the Board
31 July 2018

Click here for the Capital Adequacy Report as at 31 December 2018

Click here for the Liquidity Coverage Ratio as at 31 December 2018

Interim Report 30 June 2018

Click here for the Capital Adequacy Report as at 30 September 2018

Click here for the Bi-annual disclosures in terms of Banks’ Act,Regulation 43

Click here for the Capital Adequacy Archive Reports

Click here for the Liquidity Coverage Ratio as at 30 June 2018

Page last updated: 2019-06-06