The South African Reserve Bank Is Set To Sell Its 50% Stake In African Bank!
The South African Reserve Bank Is Set To Sell Its 50% Stake In African Bank! The South African Reserve Bank (SARB) has invited interested parties to put up their hands for its 50% stake in African Bank. The SARB acquired the stake in 2016 as part of the restructuring of African Bank after it was placed under curatorship. Since then, it provided a capital injection to assist in financing the bank’s operations.
“It was never the intention of the SARB to hold this equity stake indefinitely, particularly because its shareholding created a potential conflict of interest between its role as a regulator of the bank and as a major shareholder of African Bank,” the central bank said in a statement.
According to News24, SARB bought African Bank shares to save the bank from collapsing after it and its parent company, African Bank Investment Limited, was placed under curatorship in 2014 due to spiralling bad debt. SARB said from the beginning that as a central bank, it was not its intention to hold to the African Bank stake over a long time.
African Bank Limited, is a retail bank in South Africa that offers financial products and services. The Bank is licensed as a “locally controlled bank” by the South African Reserve Bank (SARB). Headquartered in Midrand, South Africa, the bank has a countrywide branch distribution network in addition to a full digital channel offering; as well as sales, collections and customer service Contact Centres.
As of 30 September 2019, African Bank Limited had total assets worth ZAR:28.881 billion, with shareholders’ equity of ZAR:10.659 billion. At that time the bank, its subsidiaries and affiliates employed 3,886 people. The original African Bank Limited, was established on 31 July 1975, and was a subsidiary of African Bank Investments Limited, then a bank controlling company listed on the Johannesburg Stock Exchange. On 10 August 2014, the original African Bank Limited was placed under curatorship by the South African Reserve Bank, under the terms of the South African Banks Act, Act 94 of 1990.
The SARB announced a restructuring proposal, which received support from a consortium of six South African banks and the Public Investment Corporation. A new banking group, African Bank Holdings Limited was created to assume the viable assets and some of the liabilities of the old bank. The legacy bank and the compromised part of the business was renamed Residual Debt Services Limited (RDS).
