Abil lending below levels to sustain ‘good bank’

File photo: Reuters

File photo: Reuters

Published Mar 3, 2015

Share

Johannesburg - Failed South African lender African Bank Investments is lending at levels below what is required to set up a new “good bank” using its healthy assets worth R26 billion, administrators said on Tuesday.

The bank, known as Abil, collapsed under a mountain of bad debt in August, forcing the government to appoint external administrators to oversee a restructuring that includes curving out a “good bank” using its healthy lending assets.

Monthly advances ranged between 550 and 750 million rand since August, in line with lower risk appetite and expectations, the administrators said in a statement to investors.

“This level of disbursement is below the long-term sustainable level for the core bank targeted to create the new “Good Bank”, and efforts continue to target improved, risk appropriate and profitable disbursements,” it said.

The bank has been collecting as much as R2.475 billion of debt a month since it was rescued last year, the administrators said.

Administrators for the bank known as Abil said they would publish the bank's annual results for the year ended September 2014 in May and not in the first quarter of 2015 as had been previously envisaged.

They also announced the appointment of South African veteran banker Louis von Zeuner as chairman of the good bank, whose licence they have applied for.

The bank is also in the process of re-deploying or laying off 50 non-union management level staff at its head office, the statement said.

Reuters

Related Topics: