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Finbond loses business due to SASSA switchover
Finbond loses business due to SASSA switchover. The mutual bank says the new Post Office card doesn't allow for debits or stop orders, limiting its ability to lend to grant recipients.
Finbond has lost out as the SA Social Security Agency (SASSA) moved grant recipients to a new SA Post Office card in May. The mutual bank says business volumes have been under pressure after a large portion of its SA client base moved to the new card, resulting in a 40% decline in its SASSA customer base.
The new card doesn't allow for EFT debits or stop orders, which limits its ability to extend credit to this segment of the market. However, Finbond says it's taken measures to address the issue as SASSA beneficiaries are shifted from Net1 to the Post Office.
Earlier this year, the lender accused SASSA officials of persuading grant beneficiaries to replace their Finbond bank accounts with the new Post Office Cards.
The lower volumes resulted in a 19% decline in Finbond's short-term SA loan book to R366 million in the six months to end-August. While average loan sizes were slightly higher over the period, the average tenure declined to just under four months.
Over the period, revenue from North America increased by 21% to R751 million. The group now generates just over 60% of its revenue in US dollars, up from 55.9% a year ago. It plans to make 70% to 80% of group earnings in US dollars in the next three to five years as it continues to expand its footprint in North America.
Total revenue from continuing operations increased by 12.7% to R1.25 billion. Operating profit on the same basis improved by 7.3% to R184 million and net profit grew by 1.6% to R94.2 million.
Finbond says it now plans to convert from a mutual banking to a commercial banking licence and is also applying for a licence in Malta. It's targeting a further 40 to 60 branches in the US and will add more SA branches in high-growth areas. It currently has 427 SA branches and 257 outlets in the US and Canada.
We believe that our continued growth in South Africa, the expansion into the North American short-term lending market and the implementation of our strategic action plan will ensure that we achieve results in the medium and long-term," Finbond said.
Its shares declined 1.1% to R4.08 yesterday.
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By INCE|Connect NewsFinbond loses business due to SASSA switchover. The mutual bank says the new Post Office card doesn't allow for debits or stop orders, limiting its ability to lend to grant recipients.
Finbond has lost out as the SA Social Security Agency (SASSA) moved grant recipients to a new SA Post Office card in May. The mutual bank says business volumes have been under pressure after a large portion of its SA client base moved to the new card, resulting in a 40% decline in its SASSA customer base.
The new card doesn't allow for EFT debits or stop orders, which limits its ability to extend credit to this segment of the market. However, Finbond says it's taken measures to address the issue as SASSA beneficiaries are shifted from Net1 to the Post Office.
Earlier this year, the lender accused SASSA officials of persuading grant beneficiaries to replace their Finbond bank accounts with the new Post Office Cards.
The lower volumes resulted in a 19% decline in Finbond's short-term SA loan book to R366 million in the six months to end-August. While average loan sizes were slightly higher over the period, the average tenure declined to just under four months.
Over the period, revenue from North America increased by 21% to R751 million. The group now generates just over 60% of its revenue in US dollars, up from 55.9% a year ago. It plans to make 70% to 80% of group earnings in US dollars in the next three to five years as it continues to expand its footprint in North America.
Total revenue from continuing operations increased by 12.7% to R1.25 billion. Operating profit on the same basis improved by 7.3% to R184 million and net profit grew by 1.6% to R94.2 million.
Finbond says it now plans to convert from a mutual banking to a commercial banking licence and is also applying for a licence in Malta. It's targeting a further 40 to 60 branches in the US and will add more SA branches in high-growth areas. It currently has 427 SA branches and 257 outlets in the US and Canada.
We believe that our continued growth in South Africa, the expansion into the North American short-term lending market and the implementation of our strategic action plan will ensure that we achieve results in the medium and long-term," Finbond said.
Its shares declined 1.1% to R4.08 yesterday.