VBS Mutual Bank Net Worth
In 1982, Venda Building Society—a mutual bank in South Africa, currently known as VBS Mutual Bank was founded. The bank had roughly 30,000 depositors and R800 million in total deposits by 2016. However, the bank declared bankruptcy before it could begin trading on the Johannesburg Stock Exchange as planned in 2017.
Before being placed under curatorship in 2018, the bank rose to prominence in 2016 when it granted a R7.8 million loan to the then-President Jacob Zuma, who was required to pay back the state for contentious renovations to his private Nkandla property.
In 2018, it was declared insolvent and bankrupt and placed under curatorship; around R2 billion had been stolen from South African citizens and tax payers. Because the bank was unable to meet its obligations to insurance companies and burial societies, its demise significantly hurt the funeral industry in the Limpopo Province.
It also had a terrible impact on the stokvels and saving societies in the Limpopo Province, which were owned by the less fortunate, primarily black South Africans. In October 2018, the national government declared that it would not support municipalities in South Africa that had irregularly deposited R1.57 billion with the bank prior to its demise.
The bank had R372 million in negative equity when it folded, it was found. In June 2020, the NPA filed 47 counts of theft, fraud, corruption, and violating the Prevention of Organized Crime Act against eight people associated with VBS and the bank’s auditor KPMG. On November 16, 2021, the Hawks, South African Police Services, detained three more suspects in an ongoing fraud investigation.
In February 2021, the bank’s liquidators filed a lawsuit against KPMG, their auditor, for 863.5 million rand in connection with KPMG’s audit opinion of the now-defunct Bank. The largest asset manager in South Africa, the Public Investment Corporation (PIC), filed a lawsuit against KPMG in July 2021 to recover the 144 million rand it lost as a result of the fraudulent collapse of the VBS Mutual Bank.
When it replaced the Venda bantustan government pension fund, the South African Public Investment Corporation inherited its interests in VBS bank, giving it a 25% ownership position in the institution. The Venda Royal family owned 51% of Dyambeu Investments, the bank’s largest shareholder, which held a 26% stake in the institution.
VBS Mutual Bank Net Worth
Before becoming bankrupt, VBS had a Net income of R4.7 million (2016).