African Bank much more stable - Marcus

2014-10-22 14:22 - Jaco Leuvennink
Reserve Bank governor Gill Marcus. (AFP, Lionel Bo
Reserve Bank governor Gill Marcus. (AFP, Lionel Bonaventure) ~ AFP
Cape Town - African Bank is much more stable now, functioning and continuing to grant loans, Reserve Bank governor Gill Marcus said at a press conference before the tabling of the mini budget in parliament.

Marcus also stressed that African Bank “had specific problems”, which have not affected the rest of the South African banking system, which is “sound and in which we have full confidence, although one can always learn some lessons to better things”.

Marcus said African Bank is looking at a new business model or “how to bed down the concept of the new 'good bank'”. But overall the staff are reasonably stable and the bank “functions as we expected”.

Marcus said the critical aspect for banks and especially the sector for unsecured lending, is to get the credit criteria right. Obviously there is a need to help poorer people with finance, but affordability must always be kept in mind.

The MTBPS states that R7bn has been provided by the state as backstop to the Reserve Bank in the rescue process of African Bank. But it is unlikely that Bank will draw on this facility. Government has provided no other funds to bail out African Bank.

- Fin24

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