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Johannesburg - African Bank, which collapsed in August last year, posted a record annual loss as bad debts climbed and it failed to provide enough money to cover future impairments.
Net losses were R9.3bn in the fiscal year to September, compared with a restated loss of R5.9bn in the previous 12-month period, the lender said in a statement on Thursday.
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The Reserve Bank stepped in to rescue the failed lender and appointed Tom Winterboer as the bank’s curator after funding seized up in August.
African Bank’s financial results were delayed as Winterboer’s team went through its accounts while trying to win back business and negotiate with investors. If the rescue is successful, the lender will form a so-called good bank from the remaining viable assets.
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A spokesperson for the bank said: "Disbursements of new loans and credit cards have stabilised at lower levels of about R600m per month.”
Earlier this year the bank said disbursements of R1bn per month were needed to make the good bank viable. “Collections are stable at over R2bn per month.”
African Bank said it expects to report a loss for the six months to March of between R2.3bn and R2.8bn and release reviewed results for the period in June.
African Bank will release its information memorandum, which will detail how the lender will be restructured, once first-half results are published. If the proposal is accepted, Winterboer wants to start the good bank’s operations by October 1, African Bank said.
