Cape Town – National Treasury says it expects African Bank to be relisted early next year as it is already showing signs of stability.
Tabling National Treasury’s Medium Term Budget Policy Statement (MTBPS) on Wednesday, Finance Minister Nhlanhla Nene said he expected the bank -- which was put under curatorship by the Reserve Bank recently due to an unsustainable lending business model -- would be relisted on the JSE due to the fact that the intervention was starting to yield positive results.
“Our expectation is that the new African Bank will relist on the stock exchange early next year and that the curatorship will be concluded without the use of taxpayers’ money.
“In support of restructuring, Treasury has provided a R7-billon assurance to the Reserve Bank,” he said.
The Reserve Bank, with the support of National Treasury, moved in to put the bank under its watch with the help of other banks, private investors and the Public Investment Corporation.
A team was put together by outgoing Reserve Bank Governor Gill Marcus to oversee the curatorship and to, among others, develop a new business model for the bank while ensuring that its clients are not affected by the collapse.
According to the MTBPS, over the past several years, a growing pattern of unsecured lending for personal loans boosted temporary access to credit but also proved expensive to consumers.
Earlier this year, African Bank Limited, which accounted for 2% of banking assets, began to founder, forcing the hand of the Reserve Bank Governor to intervene.
At an earlier media briefing, Governor Marcus said while a lot of good work had been done to turn the bank around, more “complex” work still needed to be done and it may take a lot of time to bring the bank back to sustainable levels.
“It is much more stable and a new credit regime has been implemented. Deposits have stabilised and the bank is open for business.
“It is functioning as we had expected… Sometime early next year, we will be dealing with a more developed bank,” said Marcus. – SAnews.gov.za
