African Bank Ownership

African Bank Ownership

  • The SA Reserve Bank wants to sell its 50% stake in African Bank.
  • It has invited local and international prospective buyers to express their interest. 
  • SARB bought African Bank shares to save the bank from collapsing in 2016.

The South African Reserve Bank (SARB) has invited interested parties to put up their hands for its 50% stake in African Bank. 

The SARB acquired the stake in 2016 as part of the restructuring of African Bank after it was placed under curatorship. Since then, it provided a capital injection to assist in financing the bank’s operations.

“It was never the intention of the SARB to hold this equity stake indefinitely, particularly because its shareholding created a potential conflict of interest between its role as a regulator of the bank and as a major shareholder of [African Bank],” the central bank said in a statement.

The SARB said that it’s now the “appropriate time” to review “potential exit options”.

It believes African Bank should get a long-term sustainable shareholder or shareholders “who are better aligned to the bank’s strategy and growth aspirations”.

SARB says it appointed “several advisors” to advise and manage its disinvestment last year.

As part of this process, it now is inviting interested parties, “both local and international”, to submit expressions of interest. The deadline is 2 July.

SARB first announced its intentions to dispose its African Bank stake in July last year.

The bank itself already indicated in 2019 that it was ready to fly without SARB’s wings, as it has increased its operating and net profits every year since it came out of curatorship and deposits it had accumulated in its investment accounts demonstrated that it had regained customers’ trust.

African Bank last week presented its half-year financial results, turning a R152 million net profit after an interim loss last year. The bank had attracted R5 billion more in deposits at the end of March than a year earlier.

SARB bought African Bank shares to save the bank from collapsing after it and its parent company, African Bank Investment Limited, was placed under curatorship in 2014 due to spiralling bad debt. SARB said from the beginning that as a central bank, it was not its intention to hold to the African Bank stake over a long time.

For African Bank to come out of curatorship and trade again, SARB, together with the Government Employees’ Pension Fund (GEPF) and a consortium of local banks made up of FirstRand Bank, Standard Bank, Absa, Nedbank, Capitec and Investec injected R10 billion to African Bank and SARB also provided R7 billion buying the bank’s bad loan book. The GEPF owns 25% and the banks’ consortium holds the remaining 25%.