The South African Reserve Bank has given notice to African Bank that it intends to sell its 50% stake in the group, bringing to an end the ‘stabilising’ role it played in the bank after its 2016 restructure.
The SARB acquired its 50% shareholding in African Bank in 2016 as part of the restructuring of African Bank Limited (renamed Residual Debt Services) after the bank was placed under curatorship in 2014.
In its role as shareholder, the SARB provided a capital injection of R5 billion to assist in financing the group’s operations.
The SARB has publicly stated that it was never its intention to hold this equity stake indefinitely, particularly because its shareholding creates a potential conflict of interest between its role as a regulator of African Bank and as a major shareholder of the Group.
Since the new African Bank began operations in April 2016, it has made good progress towards achieving its strategic objectives, while increasing profits and building a stronger balance sheet.
“The SARB believes that this is an opportune time for African Bank to obtain a long-term sustainable shareholder who is better aligned to the bank’s growth aspirations,” African Bank said.
“The SARB has therefore issued a request for proposal to appoint a transaction advisor to assist the SARB in determining the scope and approach for the disposal.”
The Reserve Bank said it anticipates that the disposal process will be completed within 18 to 24 months after the identification of a suitable buyer.
African Bank’s other shareholders are FirstRand, Standard Bank, ABSA, Nedbank, Capitec, Investec and the Government Employees Pension Fund. These shareholders support the SARB’s decision to appoint a transaction advisor and to commence a process to exit its shareholding.
The SARB will continue to support the Bank as its major shareholder until the conclusion of the disposal process, it said.
CEO of African Bank, Basani Maluleke said: “Our customers can rest assured that this process will have no impact on our on-going 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.”