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By Mzwandile Jacks

Johannesburg – African Bank Investments Limited (Abil) was confident about its prospects and expected to double the size of its advances portfolio – the total amount of money it has loaned to customers – in the next four years, Leon Kirkinis, the chief executive, said yesterday.

He said the microlender’s gross advances rose 92 percent to R20.9 billion from R10.9 billion in the year to September.

Excluding the acquisition of Ellerines, it recorded 45 percent growth in gross advances from R10.9 billion to R15.8 billion in the year to September.

Nithia Nalliah, the chief financial officer at Abil, said that when Ellerines was acquired earlier this year it had zero advances, but growth had since gone up to R5 billion.

Banks have introduced strict lending policies since the credit crunch started in the US and later affected the UK.

Kirkinis was determined that the global financial crisis, which had hammered financial institutions, would not deter the group’s growth plans.

“People like to worry about the financial markets,” said Kirkinis. “But we do not want to do that. What we are going to do is manage this business properly. We want to satisfy our customers and work harder.”

Abil said the strong internal momentum of its business unit and the restructuring of Ellerines would drive the outlook for the next financial year.

“We remain confident that the Abil unit will achieve these objectives and that this will further entrench its position as the market leader in a larger, more competitive and fast changing unsecured credit market,” he added.

Steve Meintjes, a senior analyst at Imara SP Reid, said Kirkinis was so confident about Abil’s operations that he even said the company could only be affected if unemployment continued to rise.

“He seems to think that South Africa may not see a sustained increase in unemployment,” said Meintjes.

Last week many mining companies said they were going to retrench thousands of workers. Experts said this could spill over into other sectors in the coming year.

Abil expected the restructuring of Ellerines to gain momentum next year. Kirkinis expected to complete the migration of the retailer’s financial services activities into Abil during this period. This should enable Abil to cut credit costs while it improved the risk parameters of the business.

The results of Abil for the year to September reflected the different levels of progress achieved by its two business units. It reported that headline earnings before empowerment charges rose by 36 percent to R1.8 billion from R1.3 billion.

However, basic earnings a share sagged 6 percent to R2.52 from R2.68.

Ellerines’ headline earnings of R368 million were disappointing, having taken a knock from a relatively weak sales performance.

Meintjes said: “The results are slightly disappointing compared with the interim period.”

Abil’s share price added 6.63 percent to R23.16, while the financial services sector increased 0.38 percent.