Reserve Bank moves ahead with disposal of African Bank stake

Basani Maluleke, head of African Bank.
Basani Maluleke, head of African Bank.

The South African Reserve Bank is forging ahead with the sale of its stake in African Bank. It is now looking for a transaction advisor to help it start looking at the feasibility of disposing the 50% shareholding the Bank acquired in African Bank when the latter came out of curatorship.

In a statement published on the Stock Exchange News Service, African Bank said SARB estimates that the sale could be completed within 18 to 24 months after finding a suitable buyer. SARB first announced intentions to dispose its African Bank stake in July last year, and estimated that this would only happen in a year or two. But at the time Deputy Governor, Kuben Naidoo said the Bank would take its time to first satisfy itself that African Bank is financially sound and that there is appetite among investors to buy its shares. 

On Friday, African Bank CEO, Basani Maluleke, said SARB’s exit would not affect the bank’s operations in anyway. "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." 

African Bank 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.

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 R10bn to African Bank and SARB also provided R7bn buying the bank’s bad loan book. The GEPF owns 25% and the banks’ consortium holds the remaining 25%.

African Bank said the other shareholders supported the SARB’s decision to start the process of selling its shares. It added that SARB would continue to support the Bank as its major shareholder until the conclusion of the disposal process.

ZAR/USD
16.29
(-1.03)
ZAR/GBP
21.04
(-0.38)
ZAR/EUR
19.30
(-0.82)
ZAR/AUD
11.89
(-0.59)
ZAR/JPY
0.16
(-0.94)
Gold
1950.17
(+0.16)
Silver
26.81
(-0.75)
Platinum
930.48
(-0.19)
Brent Crude
43.78
(+2.41)
Palladium
2352.84
(+1.72)
All Share
54673.65
(-0.66)
Top 40
50399.16
(-0.59)
Financial 15
9841.32
(-2.14)
Industrial 25
72558.00
(-1.08)
Resource 10
55438.10
(+0.58)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 1290 votes
It depends on how the funds are used.
73% - 8603 votes
No. We should have gotten the loan elsewhere.
16% - 1893 votes
Vote