Reserve Bank: State may not draw on guarantee for Abil

THE RESERVE Bank might have no need to draw on a R7 billion guarantee the government provided for African Bank Investments’ (Abil)’s curatorship, Finance Minister Nhlanhla Nene, said yesterday. “We are confident that at the rate we are going about the process, we are unlikely to draw on the guarantee,” Nene told reporters before presenting his mid-term budget. “On that basis, we say we will not use taxpayers’ money.” The guarantee was in addition to the R7bn the Reserve Bank is paying for the unit’s R17bn book, governor Gill Marcus said yesterday. The central bank stepped in to rescue the lender in August after African Bank forecast a record loss and announced the resignation of chief executive Leon Kirkinis. It was placed under curatorship after the so-called bad bank with soured loans was broken off from a good bank, which continues to do business. “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 taxpayer money,” Nene said in a printed copy of his budget speech. The new African Bank was stable, the company was granting loans and open for business, Marcus said. – Bloomberg