Abil buys rest of TEBA Credit

TEBA Credit was a joint venture established in 2000 between the Abil Group and TEBA Bank to provide unsecured personal loans to employees in the mining community.

Abil said it had been agreed to dissolve the joint venture, in order to allow the two groups to provide financial services to the mining community independently of each other and to concentrate on their respective core strategic focuses.

The purchase price of the transaction is an amount equal to 50% of the net asset value of TEBA Credit as at February 28 2005 plus R20m.

Abil said the effect of the transaction will be to increase gross advances by R165m and impairment provisions by R23m.

In terms of the agreement, TEBA Credit will have the right to continue to operate from those outlets that were previously run for and on behalf of TEBA.

Moreover, TEBA Bank will be entitled to compete freely in the provision of financial services to employees in the mining community.

"It is the intention of the Abil Group to divisionalise the TEBA Credit business into African Bank, subject to regulatory approval, and to operate the business under the African Bank Miners Credit brand," Abil added.