African Bank loses market value!

“Our role is to best promote the interest of the creditors and banking sector as a whole and to maintain investor confidence in South Africa,” Winterboer said.

“We confirm that African Bank is open for business and that our retail customers’ money is safe.”

On Sunday, Reserve Bank Governor Gill Marcus said African Bank had been placed under curatorship.

The conclusion reached by the Registrar of Banks and the decision by the minister of finance to place African Bank under curatorship with effect from 4pm on Sunday, Marcus said was the first important measure.

The African Bank Investments Limited (Abil) board had advised the registrar that it does not oppose curatorship and had taken the appropriate resolutions to facilitate the process.

Winterboer was appointed as the curator and would be assisted by a team of experts, she said.

He said they were aware of the task at hand.

“Our task at hand is to ensure the smooth and efficient running of African Bank and to ensure that the regular operations and collections continue effectively, while implementing the plan in a respectful and dignified manner.

“There is much work to be done and it is understandable that our customers and employees have many questions as to the operational status of African Bank,” said Winterboer.

It was important to note that the curatorship applied to African Bank and not to Abil, he said.

The curatorship was a protection procedure and it gives the curator, who acts under the supervision of the registrar, the power to develop and implement a plan to ensure that African Bank has a secure future.

He said all 511 of the bank’s nationwide branches and the 1000-seater call centre would remain open.

“Employees have already been informed that the new measures will in no immediate way negatively impact on their jobs, their salaries will be paid and their contracts will be honoured in accordance with South Africa’s labour laws,” said Winterboer.

“A recovery process is under way to turn the bank into a high quality and profitable institution once more. This can be achieved through, amongst other things, our loyal customers and employees.”

On Sunday, Marcus said among many African Bank Investment Limited (Abil)’s woes, was that in a six-month period to March 2014, the institution posted a headline loss of R3.1 billion.

“They assured the market that the book written after June 2013 was significantly better and forecast that they would return to profitably in the second half of the year,” she said at the time.

Abil’s trading statement for the third quarter released on August 6, 2014 was markedly worse than what was expected, with an estimated headline loss for the full year to September 2014 financial year of R6.4 million.

African Bank’s shares plummeted last week after it warned of massive losses and said it needed about R8.5 billion in new capital.

Marcus said African Bank served 3.2 million people.

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