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Interim Report - 30 June 2016

Commentary on the unaudited results for the period ended 30 June 2016

The bank continued to see growth in its deposit-taking activities over the past 12 months, albeit to a lesser degree than was previously  the case, with deposits from customers increasing by R126,7 million or 2,9% for the 12 month period since June 2015 while the growth for the six months ended 30 June 2016 amounted to R21,4 million or 0,5%.  The bank has also achieved an overall advances growth of R185,3 million or 5,1% since June 2015 however since December 2015 the bank has seen its advances drop by R13,7 million or 0,4%.

With the growth in advances year-on-year exceeding that of deposits, surplus cash which is invested in Shariah-compliant equity finance has decreased by R109,0 million or 14,2% year-on-year. Since December 2015 however, given the growth in the deposit book and contraction in advances, excess funds invested in equity finance grew by  R31.9 million or 5,1%. Cash and cash equivalents increased by R94,4 million or 25,1% for the 12-month period since June 2015 and R56,4 million or 13,6% since December 2015.  This is as a result of a change to liquid asset holding requirements which took place close to interim results being finalised. The increase in the regulatory balances will result in lower cash and cash equivalents holdings going forward. Accounts payable increased significantly year-on-year. However, the increase relates to a timing difference on electronic payment processing.

Income from advances and equity finance increased by R14,9 million or 7,9% when compared to that of June 2015. After sharing with depositors and accounting for credit impairments the net income from funding income activities increased by R8,5 million or 9,1%. Foreign exchange income together with the income earned from unit trust sales, electronic banking fees and other fee income, contributed to the decrease in non-funding income by R5,7 million or 24,0% year-on-year.

Operating expenditure increased by 13,2% or R10,7 million year-on-year driven, mainly by higher employment costs and additional deprecation as a result of new capital projects going live during the year. After consideration of the above, the net effect is a decrease of 22,0% in total comprehensive income when compared to June 2015, resulting in basic and diluted earnings per share also decreasing by 22,0% for the same period.

As can be seen from the results above, the macro and micro-economic challenges facing the country as a whole have had a negative impact on the bank’s results for the six months ending June 2016. In particular, the significant fluctuations in the exchange rate has proved a challenge to our foreign exchange business. The appreciation of the Rand, although positive for the country, has impacted negatively on our marginal open positions held during the course of the year.

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.

Interim Report 30 June 2016

Click here for the Capital Adequacy Report as at 31 March 2017

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 31 March 2017

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Albaraka Bank Ltd Reg No 1989/003295/06. Albaraka Bank Ltd subscribe to the Code of Banking Practice of The Banking Association South Africa and, for unresolved disputes, support resolution through the Ombudsman for Banking Services. Albaraka Bank Ltd are an authorised financial services provider. Albaraka Bank Ltd is a registered credit provider in terms of the National Credit Act, 34 of 2005 (NCR Reg No NCRCP14).  An Authorised FSP No.: #4652