In a candid conversation with The National on Friday, African Bank chairperson Thabo Dloti offered an unusually frank account of the pressures now facing the bank, the reasoning behind its recent leadership change, and the "brutal" year management expects before the institution can claim it has turned a corner.
Excelerate25: The right strategy, wrongly sequenced
In 2021, African Bank launched Excelerate25, a strategic roadmap to guide the bank's evolution to expand beyond its traditional unsecured lending book into business banking and asset finance.
The bank thus transitioned into a diversified retail and commercial banking platform through several acquisitions, including Ubank, Grindrod Bank, and Sasfin’s Capital Equipment Finance and Commercial Property Finance businesses, and growth initiatives such as launching a business banking division.
In Dloti's telling this week, the Excelerate25 delivered on its central promise. But he admitted that the acquisitions that underpinned that diversification ran into problems nobody had modelled for.
Dloti was emphatic that the strategic logic was tested properly upfront: "We had business cases, investment cases for all the transactions... Not only the upside that we were looking for, what are the things that could go wrong? We did that."
The real damage, he said, came from "unintended consequences, things that you didn't plan for, that happened."
Chief among these was regulatory timing. Deals that were meant to be absorbed and digested in sequence instead landed on top of one another because approvals dragged on far longer than expected. In one case, that took 18 months.
"That caused a massive indigestion in our system," Dloti said, describing a bank that was "paralysed" as costs from multiple integrations hit simultaneously while the anticipated revenue was delayed.
Where acquisitions worked
Dloti was clear that the acquisitions themselves were not the failure. He said the bank targeted capability it didn't have: business banking, property finance, asset-backed and capital equipment finance, and supplier/purchase-order funding, rather than simply buying customer books.
Those units, he said, are functioning.
"We are growing the business. We are lending more money, we are capacity building."
The strategic rationale, he argued, still stands: build the capability once, rather than spend years and far more money constructing it from scratch.
"The acquisitions have not failed. It's a good strategy, half of it well implemented, the other half needed a different implementation," Dloti said.
However, he said the unresolved problem sits in the back end: that is disparate legacy banking platforms that haven't yet been integrated, which blocks the cost synergies and cross-selling the deals were meant to unlock.
The bank's answer, for now, is a technology "overlay" that lets staff access customer information across platforms without a multi-year migration.
Hitting the brakes
The past five years have been a period of learning the hard lessons for African Bank. Having absorbed three institutions at once, Dloti said African Bank is done acquiring for the foreseeable future. The organisation, he admitted, lacked the specialised skills needed to manage integration complexity at that scale.
"It's a different skill set. If you don't have those people in your organisation, then you are learning from scratch," he said. "And I think we thought about it, but actually, in retrospect, it's something that you want to invest in."
Going forward, growth in the newer books will be organic.
"I'm really circumspect now of buying customers," Dloti said, arguing that inheriting someone else's back-end problems isn't worth the shortcut.
The bank is also shedding acquired assets, that sit outside its core focus, equity stakes and peripheral projects he described as "nice little toys" and "excess weight" that widens management's span of attention without adding proportional value.
Until that consolidation work is done and the core lending business is stabilized, he argued, taking on new acquisitions would only compound the same problem that undid the pacing of Excelerate25.
The unforgivable cost: A neglected core business
If there is one decision Dloti regrets, it is not the acquisitions but it's what happened to African Bank's "bread-and-butter" unsecured lending business while management's attention was consumed by integration.
He said loans were written poorly at the wrong point in the cycle, driving up impairments.
"We shouldn't have let the goose that laid the egg suffer during that process. It suffered. I'm pissed off about that. Our core business. Yes, we would argue that we were paying attention to it," he said.
"Actually, we were not. Because if I look at where we ended up, we didn't pay enough attention. You can't lose the bread and butter of your business. That is always the thing to protect first and foremost."
Why Kennedy Bungane had to exit
Dloti pushed back on speculation that former CEO Kennedy Bungane's exit was abrupt or driven by certain motives, insisting the board had flagged deteriorating results well before his departure was announced.
The bank has seen its profits decline every year since 2022 and by March 2026, it reported a R624 million interim loss. Credit impairment charges had increased to R1.8bn from R1.2bn, reflecting pressure from the current credit environment.
"We parted ways with Ken. We knew things were not going well," he said, pointing to a negative trend visible in results from early 2025 through half-year and full-year reporting.
Dloti said management was pushed to respond "much more drastic, and much faster".
And while Bungane engaged with the board and produced a turnaround plan, it became clear the pace of response required did not match the scale of urgency the situation demanded, in Dloti's words, the sense that "the house was on fire."
"It became very clear for us that, do we have the right jockey to actually do this, who grasps and can actually do something like this? We were seeing it as an urgent matter and the reaction that we were getting, we didn't feel like the house was on fire," he said.
Using a football analogy, Dloti said the board's engagement with Bungane "distinctly" felt like they were asking a striker to become a defender.
"Through this process it became very clear that we were asking the wrong person. As much as he was producing a plan, this is an intellectual exercise. It didn't feel like we are at war."
Ultimately, the board concluded a different type of leadership was needed to execute the harder, less glamorous phase of consolidation — cutting, not building.
Why this financial year will be painful
Dloti did not sugar-coat the outlook. This financial year, ending in September, is what he called "the hard year". He said this is the period in which the bank must strip out excess cost and complexity before benefits show up.
Dloti did not want to speculate whether losses from the prior year might continue or might be more or less the same as the bank still has to audit the numbers, but conceded that investment in the core business will not yet show returns.
He described proposed the retrenchment process under Section 189, which could impact 1,200 jobs and the closure of up to 90 branches, as unavoidable given the alternative.
"The worst thing we can ever make is prolong things and put the whole organisation at risk," he said.
"We are scaling down, cutting things to pieces and fitting them. It's ugly. It's not a pretty sight. So it requires a different mindset of people that are not afraid to actually be unpopular."
The turnaround: Cost, focus and technology
Having suffered such a bruising period of operating, Dloti forsees the recovery plan resting on three pillars: taking out duplicated costs from running parallel legacy systems, doubling down on quality and skills in the core lending business, and shedding non-essential acquired assets to free up management capacity.
Technology, in the near term, is about extracting efficiencies from what the bank already owns rather than rebuilding platforms from scratch; longer-term, Dloti sees it reshaping the business model into something leaner and more responsive.
He remains, by his own account, cautiously optimistic — invoking a lesson from 35 years in financial services.
"Not everything has to work, but sufficient things have to work to change the momentum," he said.
An IPO, once mooted for 2026, has been pushed back until the bank can demonstrate that turnaround in its numbers rather than its narrative.