CONTENT DIRECTORATE 3 Directorate NON-EXECUTIVE CHAIRPERSON 4-5 Business Philosophy and Profile Mr P Ranchod* 6 Financial Highlights NON-EXECUTIVE DIRECTORS 8-9 Chairman’s Report Mr TJ Fearnhead* Mr RA Shough°* 10-11 Chief Executive Officer’s Report Mr W Krüger* 12-15 Risk and Capital Management Review Mr G Bizos (SC)* 16-17 Corporate Governance Mr A Lizos+ 18-20 Sustainability Report Mr G Grigoropoulos+ 22-23 Product Portfolio and Management EXECUTIVE DIRECTORS 24-71 Annual Financial Statements Mr S Georgopoulos (Chief Executive Officer) 72-73 Notice of Annual General Meeting Mr DJ Adriaanzen Mrs C Michaelides Form of Proxy Mr D Haarhoff (Alternate to Mr DJ Adriaanzen) °British +Greek *Independent Financial statements prepared under the guidance of Chrisanthi Michaelides, Chief Financial Officer The South African Bank of Athens Limited (“Bank of Athens”) (Registered Bank) Registration number 1947/025414/06 Registered Credit Provider (NCRCP 6) 2 Authorised Financial Services Provider (FSB5865) 3 The South African Bank of Athens Limited is focused on The alliance banking service focuses on the creation of delivering world class banking services to the medium-sized commercial partnerships to enable the provision of a variety of business market in South Africa. A truly South African bank, it banking services, depending on the needs of the partner’s was established and has been operating in this country since market segment. These banking products range from full function 1947. branded bank account offerings through to payments and BUSINESS prepaid card solutions. The bank’s focus is twofold and focuses both on the delivery of a comprehensive business banking offering to its customers, as These solutions are uniquely branded and include hosting the well as the provision of alliance banking services. personal market offerings of MoovaMoney (in partnership with EDCON), Olympus Mobile, WIZZIT and SureCard Financial The business banking offering is focused on the cornerstones of Enabler (SFE) previously known as Surebank. business banking – lending, transactional banking, treasury and foreign exchange. The Bank possesses principle clearing bank status, and is a fully PHILOSOPHY authorised dealer in foreign exchange. It fully subscribes to and These business banking solutions are delivered through a supports the Code of Banking Practice and the Financial Sector dedicated team of highly experienced Relationship Managers Charter. that support a culture of service excellence and professionalism. AND PROFILE The Bank is an Authorised Financial Services Provider. 4 5 FINANCIAL HIGHLIGHTS STATEMENT OF 2016 2015 2014 2013 2012 FINANCIAL POSITION R’000 R’000 R’000 R’000 R’000 Capital and reserves 267 193 257 080 286 268 263 153 275 411 Secondary capital 50 000 50 000 - 40 000 40 000 Total assets 2 265 461 2 509 951 2 283 832 2 214 668 2 019 741 STATEMENT OF 2016 2015 2014 2013 2012 COMPREHENSIVE INCOME R’000 R’000 R’000 R’000 R’000 Total income before charge for bad 139 811 143 707 141 357 133 142 111 520 and doubtful advances Net operating profit / (loss) before (29 356) (26 569) (44 025) (2 753) 2 057 operational loss and taxation Net operating profit / (loss) before (29 356) (26 569) (58 190) (9 953) 2 057 taxation Attributable profit / (loss) to (29 356) (26 569) (58 190) (9 953) 2 057 ordinary shareholders 6 7 CHAIRMAN’S REPORT When considering the journey that The South African Bank of remains subject to approval by the relevant regulatory authorities a smooth majority shareholder transition is a critical objective, commitment are, in our view, essential to the successful delivery Athens (SABA) has taken over the past 70 years, I have no doubt as well as the Minister of Finance, we are pleased by the decision while still maintaining the focus on a return towards profitability. of a good set of results in 2017. that 2016 will be considered to be a particularly important point of AFGRI to invest in SABA and to support the return to a growth The Board will monitor this process of change closely and will in the Bank’s history. Several key events and changes occurred focused strategy. continue to support the management team in their efforts. Lastly, and most importantly, we are deeply appreciative of in the past year which will prove to be central to the Bank the loyalty and support shown by our customers and business returning to a more competitive and forward-looking state. Operationally, SABA was faced with challenges in the local In closing, and on behalf of our Board of Directors, I would like partners. My sincere thanks once again for their continued economy as well as in the constraints it faced internally during to offer my assurances to the business partners, customers and support during 2016 – we look forward to an even better year These changes include the final completion of the long awaited 2016. The constraint of limited growth through limited capital depositors, and the staff of the Bank that the Board will remain ahead. new core banking systems, as well as the start of the journey remained the most significant block to SABA’s performance and vigilant throughout this transition process to ensure that their towards a change in the majority shareholder. The systems the Board has taken note of the effect of this challenge on the interests are protected. We are confident that this significant journey has been a long and arduous one, and we are most financial statements of the Bank. In addition, the imposition of change will in no way diminish but will rather improve the services pleased with the launch of a new Internet Banking capability that administrative sanctions during the year by the South African and benefits they enjoy at SABA. brings this critical business channel to a more competitive level. Reserve Bank (SARB) was disappointing and every effort is being made to ensure the appropriate enhancement and improvement of I would also like to thank my fellow Board members for their P. Ranchod On the shareholding front, we are both optimistic and saddened SABA’s processes in response to this. Despite these challenges, contributions during 2016. Their leadership and direction during Chairman by the announcement that the National Bank of Greece S.A the management team managed to deliver a credible performance the past year have been invaluable. I also thank our shareholders Johannesburg (NBG) has concluded an agreement to sell its shareholding in in the key operational areas of the Bank and we remain convinced for their support and patience during the past year of change. 28 April 2017 the Bank to AFGRI Holdings (Pty) Ltd. NBG has been an active that the Bank has the ability and structures to return solid growth Once again I offer my thanks to the CEO, his executive and supportive parent of the Bank for a 70 year period and it is and performance figures with the right level of support. with sadness that we will bid them farewell as they honour their management team and the staff of the Bank. The Board continues own Restructuring Plan and in line with its commitments towards Looking ahead, 2017 will undoubtedly be a key year for SABA to have the utmost confidence in their ability to manage the European Commission’s DG Competition. While this sale as it enters into its 70th year of existence. The management of Bank through these momentous changes and their energy and 8 9 CHIEF EXECUTIVE OFFICER’S2016 was another challenging year for the South African Bank of was particularly pleasing. In 2016 we also saw the closure of REPORTthe While National Bank of Greece has proven to be a valuable THANKS Athens (SABA) but ultimately a watershed one as well. The year MTN MobileMoney product which, while disappointing, played an and supportive shareholder over nearly 70 years of the Bank’s was characterised by difficult economic conditions, challenges in important role not only as a revenue stream for the Bank over the existence, recent difficulties in their own market and economy 2016 proved to be a year of momentous change and I would like the make-up of the balance sheet, funding constraints and major past four years, but also as a contributor towards the operational makes this change a positive one for SABA and the management to offer sincere thanks to our staff who have made this possible. systems and process changes. establishment of the Alliance Banking unit. A healthy pipeline of team is optimistic about this prospective change. Their commitment, and their sustained effort to improve the Bank new opportunities remains in place and we expect this business have made all the difference. Despite these difficulties, the Bank weathered the storm and to continue growing. LOOKING AHEAD managed to end the year in line with forecasted expectations. Once again, I would also like to express thanks to our loyal When this is taken in the context of the extraordinary costs SYSTEMS AND OPERATIONS In 2017, we hold the view that SABA will continue to face customers for their support during 2016 and we are excited to (notably the costs of funding and capital, as well as the additional challenges both internally and externally. We also hold the view embark on this new chapter in the Bank’s life with you. We are general provisioning and the regulatory fine imposed) and growth The core and internet banking system was finally completed that the changes in 2017 will see the Bank emerge not only pleased at the public statements from our proposed new majority constraints imposed on the Bank, SABA again demonstrated an and went live on 18 February 2017. While this project took more better, but as a much stronger competitor.