AFRICAN Bank’s performance has improved over the past three years. It reported a third successive year of growth when it released its results for the year to the end of September 2019.     Simphiwe Mbokazi African News Agency (ANA)
AFRICAN Bank’s performance has improved over the past three years. It reported a third successive year of growth when it released its results for the year to the end of September 2019. Simphiwe Mbokazi African News Agency (ANA)

SA Reserve Bank ready to dispose of its 50% stake in African Bank

By Sandile Mchunu Time of article published Feb 17, 2020

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DURBAN - The South African Reserve Bank (SARB) has informed African Bank Holdings Limited (ABHL) about its intention to dispose of its 50percent stake in the bank and open a way for a long-term sustainable shareholder that is better aligned to the bank’s growth aspirations.

SARB acquired its 50percent shareholding in ABHL in 2016 as part of the restructuring of African Bank after the bank was placed under curatorship in 2014, with SARB providing a capital injection of R5billion to assist in financing the group’s operations.

SARB said on Friday that it had published a request for a proposal to appoint a transaction adviser relating to the future sale of its shareholding in ABHL.

SARB said it had publicly stated that it was never its intention to hold this equity stake indefinitely, particularly as its shareholding created a potential conflict of interest between its role as the regulator of African Bank, and as a major shareholder of the group.

It said since April 2016, African Bank had made good progress towards achieving its strategic objectives, while increasing profits and building a stronger balance sheet.

African Bank chief executive Basani Maluleke said the bank appreciated the support received from SARB as a major shareholder since 2016.

“We have always been mindful that SARB’s shareholding was short term. Our customers can rest assured that this process will have no impact on our ongoing efforts to advance their lives by providing relevant and affordable financial products, together with great customer service.

“Our investors can also be assured that we remain committed to growing African Bank’s image as a trusted bank and a significant player in the banking sector,” Maluleke said.

African Bank has improved over the past three years, and reported a third successive year of growth when it released its results for the year to end September 2019.

It reported a 13percent increase in operating profit, largely due to improved results in the credit business.

The bank has attracted new customers, with savings and investments increasing by 115percent to R2.4bn.

SARB indicated in July that it wanted to dispose of its shareholding in ABHL, with African Bank estimating that the sale could be completed within 18 to 24 months after finding a suitable buyer.

African Bank’s other shareholders include FirstRand, Standard Bank, Absa, Nedbank, Capitec, Investec and the Government Employees’ Pension Fund.

“These shareholders support SARB’s decision to appoint a transaction adviser and commence the process to exit its shareholding,” SARB said.

But it said it would continue to support the bank as its major shareholder, until the conclusion of the disposal process.

BUSINESS REPORT 

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