African Bank out of the woods (2024)

FAQs

What happened to Abil that led to their collapse? ›

The Myburgh Report that analysed the reasons for Abil's collapse made some very uncomfortable findings. Financially speaking, what had led to the bank's collapse was not making sufficient provision for bad debts and engaging in unsustainable lending.

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.

African Bank, which emerged out of one of SA's biggest banking collapses, said on Wednesday it swung into an interim loss after pressure on its customers as a result of a deteriorating economy prompted it to fork out billions of rands for credit impairments.

Today, the African Bank Group announced its financial results for the half year ending March 2022. Its net profit after tax increased by 145% to R372 million, a testament to the Group's resilience during what has been a difficult time for many businesses.

African Bank collapsed under a weight of bad debt in August 2014. The Sarb governor at the time, Gill Marcus put the bank into curatorship and initiated the Myburgh investigation to determine whether any fraud had taken place and whether any business had been “conducted recklessly or negligently”.

Saambou Bank was a South African bank that was founded in 1942 and was liquidated in 2006.

And so it was with Basani Maluleke, who has been CEO of African Bank since April 2018 and who suddenly announced that she will leave the bank in April to pursue other “career opportunities”.

Following a debt crisis, African Bank was placed into curatorship in 2014. The Reserve Bank then bought a 50% stake in the bank to save it from collapse, but didn't want to be a long-term investor given conflicts of interest.

Funds can take up to 72 hours to reflect in your bank account, however if you have an African Bank My World account, funds will be available on the pay out date.

African Bank Holdings is 50% owned by the Reserve Bank, with the Government Employees Pension Fund (GEPF) owning 25%. A consortium of five South African banks holds the other 25% on a pro-rata basis: Capitec (1%), Investec (2%), Nedbank (4%), Absa Trading and Investment (5%), Standard Bank (6%) and FirstRand (7%).

What are the results of African Bank 2023? ›

On Wednesday the group reported a total net loss after tax of R44m for the six-months to end-March 2023, which compared to an interim profit of R372m for the corresponding period the previous year, thanks largely to soaring impairments in its consumer banking division.

African Bank is dedicated to creating relevant products that help to uplift South Africans, including loans, investment and insurance products.

Why did it collapse? The collapse happened for multiple reasons, including a lack of diversification and a classic bank run, where many customers withdrew their deposits simultaneously due to fears of the bank's solvency. Many of SVB's depositors were startup companies.

Following a debt crisis, African Bank was placed into curatorship in 2014. The Reserve Bank then bought a 50% stake in the bank to save it from collapse, but didn't want to be a long-term investor given conflicts of interest.

African Bank was a failure of governance, of risk management, of impractical accounting practices, of hubris and in some cases of investors underestimating the risk in the bank.

African Bank was started by Dr Sam Motsuenyane and Dr Richard Maponya and other Black businessmen. It took them 10 years to raise the required R1m to open the bank - which in the 60s and 70s was a vast amount of money.