South Africa: African Bank placed under curatorship
In South Africa, African Bank has been placed under curatorship after it posted a headline loss of R3.1 billion (€218 million) and unveiled a trading statement for the third quarter that was worse than what the market expected.In South Africa, African Bank has been placed under curatorship after it posted a headline loss of R3.1 billion (€218 million) and unveiled a trading statement for the third quarter that was worse than what the market expected.
"The first important measure has been the conclusion reached by the Registrar of Banks and the decision by the Minister of Finance to place African Bank under curatorship with effect from 4pm today," Reserve Bank Governor Gill Marcus said on Sunday (August 10th), quoted by the South African Government News Agency.
"The problems that have beset African Bank are, in our view, largely specific to their current business model, which does not include a diversified set of products and income streams, nor does it offer transactional banking services," he added.
Finance Minister Nhlanhla Nene has appointed Tom Winterboer - a member of the global financial services leadership team at PricewaterhouseCoopers - as the curator. The bank will remain open for business during the duration of the curatorship.
The resolution process will ensure that the
operations and collection of African Bank continue effectively and efficiently, said Gill Marcus. It will also identify performing loans and assets to be maintained in a good bank.
African Bank will receive a R10 billion capital injection by a range of banks such as Capitec Bank and Investec Bank Limited, which have formed a consortium to underwrite the R10 billion capital raising. The Reserve Bank said it would pay R7 billion of African Bank's bad loan book.