African Bank placed under curatorship
Fin24

African Bank placed under curatorship

2014-08-10 16:20

Johannesburg - African Bank [JSE:ABL] has been placed under curatorship with effect from 16:00 on Sunday August 10 2014, the SA Reserve Bank (Sarb) announced on Sunday afternoon.

"Sarb in consultation with the Minister of Finance, has decided to implement a number of support measures," said Sarb governor Gill Marcus.

"This will further strengthen the resilience of the banking system as a whole, and, importantly, they will provide African Bank with the best chance of a viable future."

According to Marcus the curatorship and resolution process will ensure that the regular operations and collections of Abil continue effectively and efficiently.

It will also identify performing loans and positive assets to be maintained in a good bank.

"Sarb will purchase a substantial portion of the non- and under-performing assets and other high risk loans from Abil in order to separate them from the good bank," said Marcus.

She said a new entity created in the process will be recapitalised by a capital raising of some R10bn underwritten by a consortium.

In this way current shareholders will get an opportunity to participate in the recapitalisation of the new entity.

Abil split into two parts

The resolution of Abil will see the bank split into two parts.

On the one hand a good bank, which will be recapitalised.

"Let me emphasise here that the R10bn recapitalisation is for the good bank, which has a book value of R26bn net of portfolio impairments," said Marcus.

On the other hand, the bad book, which comprises a substantial portion of the non- and under-performing assets, will be housed in a vehicle with the support of the Sarb in order to separate these from the good bank.

As a result, the bad book will no longer form part of Abil. The bad book currently has a book value net of specific impairments of R17bn for which the Sarb will pay R7bn.

"Collection against the bad book will be continued, and indeed strengthened: There is no payment holiday for anyone owing on a loan from African Bank," said Marcus.

Abil's board does not oppose curatorship and has taken the appropriate resolutions to facilitate the process.

Curator appointed

The minister has appointed Tom Winterboer of PwC as the curator. He will be responsible for African Bank with immediate effect.

"The curatorship is a protection procedure which gives Sarb the legal means to create the necessary space to implement a resolution plan capable of ensuring that the business of Abil gains a secure perspective for the future as a lending institution with a transformed business model," said Marcus.

An important aspect of the curatorship is that the curator has the discretion to suspend payments of interest.

"While interest continues to accrue, he is expected to suspend interest payments generally with immediate effect, except for interest payments on retail deposits," said Marcus.

"The measures that have been taken are, in our view, in the best interest of all stakeholders, whether depositors, shareholders, creditors or clients."

Retail depositors

Retail depositors represent less than 1% of Abil’s creditors.

"We are, therefore, able to make an unequivocal commitment to all existing retail depositors that their money is safe and that they can continue with African Bank as their bank without fear that their deposits will be frozen or lost," said Marcus.

"They will have full access to their money in the ordinary course of business."

Marcus said despite what is happening to Abil, SA’s banking sector remains healthy and robust.

"There have been no indications that other South African banks have been affected negatively by Abil’s trading update or current situation," she said.

Leon Kirkinis, co-founder of Abil, resigned with immediate effect on Wednesday.

- Fin24

* Are you an African Bank or Ellerines (Abil's loss-making furniture unit) customer? Tell us of your concerns regarding this latest development.

Comments
  • Dimitar Kostov - 2014-08-10 16:29

    Whatever happened to the free market economy? First America bails out reckless bankers and now our own government does it? Socialism for corporations... capitalism for the average person.

      Malcolm Nicolson - 2014-08-10 22:43

      An ANC politician said the ANC should have a bank to help the poor, or something like that, here is their chance, shares are cheap. And god help the tax payer.

      Puleng Lelala - 2014-08-11 05:58

      This is not an "African" problem as most of you are trying to make it. If most of the people who have commented on this site did they research or better yet actually read the news and know what is happening in the world, you would know that this has happened in America and Europe (debt crisis). Please do yourselves a favour and actually read and therefore make informed comments @Norman: I hope you are aware that African Bank has a diverse organizational structure so I urge you refrain from such ignorant comments with racial undertones.

      Oopkop Denker - 2014-08-11 11:36

      So you suggest that they should have gone under? Do you have any idea what ripple effect this may have caused and what it would have done to investor confidence? Maybe the deeper reality is that the banking system is inherently owned by the people and that there may as well just be one bank that gives the best rates not to corporations that want to make money out of the money of the people, but to the people itself. Cut out the middle man. The central bank is evidently quite capable to take ownership of issues. So why can't we borrow our own money straight from them? The SARB is after all owned by us...

      Parent Pissedoff - 2014-08-11 14:06

      Sorry, people that decide to put their investments and savings in a bank called "African" is just plain stupid!

      Puleng Lelala - 2014-08-11 16:18

      @Sitione, Oh for goodness sake, you literally have access to the internet at the palm of your hands yet you still utter such ludicrous statements. There's google, opera mini, bing, firefox and so forth. Pick one and use it! I suggest you type Global financial crisis or 2008 financial crisis and see just how many non-African named banks failed and received bailouts in the USA and UK from they Reserve banks and governments i.e Goldman Sachs, Morgan Stanley, Royal Bank of Scotland..the list is endless. #EducateYourselfBeforeSpeaking

  • Barry L. Ward - 2014-08-10 16:36

    ... about what the impact wold be .............. Hmmmmmm

  • Eidel Bock - 2014-08-10 16:37

    Too late for tears. irreversible damage done

      StormerHJ - 2014-08-10 17:32

      And who form part of all those non- and under performing assets - in most cases most probably BEE Co's

      StormerHJ - 2014-08-10 17:58

      And the managing director, Leonidas Kirkinis earned a massive salary !! Will Ellerines Holdings be the next to subside ?

  • Clark Lin - 2014-08-10 16:43

    WHAT DOES THIS MEAN?? is curatorship good?? is it a good time to buy ABIL shares??

      Clark Lin - 2014-08-10 16:46

      and what if i already own ABIL shares... does this mean ABIL is going to be liquidated?

      Valene Reddy - 2014-08-10 17:32

      Yes, i personally think its a good time to buy shares at 31c. They have some big shareholders including the government pension. I don't think the powers be will let their investment go down without putting effort to reviving this bank.

      Henno Du Preez - 2014-08-10 19:47

      the market will run, yes. by the time the market opens at 9am the shares wont be available at 31c anymore, it should reach your buy-in level pretty quick..just my humble dont know much oppinion

  • Magane Nchabeleng - 2014-08-10 16:44

    What does this mean , Must I still repay my loan with them ?

      Freddie Jones - 2014-08-10 16:53

      YES! You borrowed the money, it was NOT a gift.

      Kenneth Corsar - 2014-08-10 17:28

      YES, YES, YES!!!!! If you have a loan, you WILL still have to pay it back. This change isnt a free holiday.

      Magane Nchabeleng - 2014-08-10 17:36

      The government is using my tax money to rescue African Bank , It means I have already paid indirectly . Paying the loan amounts to paying twice

      Carl Botha - 2014-08-10 18:40

      Magane, it depends if you belong to the Good Bank or the Bad Bank!

      Nthokolose Puleng Marope - 2014-08-10 19:08

      Magane the government isn't using your money to bail out African Bank, Reserve bank is privately owned,

      Collins Ntelele - 2014-08-11 04:49

      You have the right to ask and know.There's no need to be attacked by the ''know too much'' intellectuals here.

      Goeie Donner - 2014-08-11 06:56

      Ho lee cr@p...

      Lee-Anne Zuma - 2014-08-11 11:10

      Pay up! Why should my tax money fund your loan!!!

      Brian Keamohetswe Marumo - 2014-08-11 13:35

      Hehehehehe Freddie Jones well said.

  • Dee Bone - 2014-08-10 16:46

    of course. who's to follow?

  • Paljas Paljassie - 2014-08-10 16:53

    African bank?

      Slegs Blankes - 2014-08-10 17:00

      No.

  • Clark Lin - 2014-08-10 16:56

    can someone who knows what this means please comment?

      Made-In SA - 2014-08-12 09:27

      I don't know anything.Just that taxpayer money will be used to rescue them.

  • Grant Montgomery854 - 2014-08-10 17:00

    Only R10 billion of tax payers money ? Why that's less than Zuma steals from us in a month... Just throwing good money after bad.

      Nthokolose Puleng Marope - 2014-08-10 19:03

      Not everything is about tax payer's money, Reserve Bank is in the hands of capitalists.

  • Grant Montgomery854 - 2014-08-10 17:00

    Only R10 billion of tax payers money ? Why that's less than Zuma steals from us in a month... Just throwing good money after bad.

  • Clark Lin - 2014-08-10 17:07

    is African Banks current situation the same as what happened to Saambou? because Saambou actually doesnt exist anymore..and they were also put on curatorship. but i see Sarb mentions their steps are measures to ensure the survival of the bank. what will happen if i own some African bank shares. and will the ABIL still be trading on Monday??

      Chase Cameron - 2014-08-10 17:14

      Your shares were trading at a low of 28c on Friday. So they are pretty much worthless right now.

      Kenneth Corsar - 2014-08-10 17:25

      African Bank isnt in the same position as Saambou, as it doesnt hold massive public deposits. Saambou collapsed because it didnt have the money to repay all its depositors. African Bank faces issues with investors, very different scenario.

      Kenneth Corsar - 2014-08-10 17:32

      dependent on what is decided the existing shareholders may be offered shares in the 'new' bank at some point, but value will be an issue. JSE makes decisions on listed companies not SARB. but this may see ABIL being suspended on JSE.

  • SidneyGilroy - 2014-08-10 17:15

    I sincerely hope this works, Gill Marcus. You are desperate to avoid another sovereign debt downgrade that will see the ZAR spiral. So, you had no other choice. What happens when the bad loans you now own, defaults? And what happens when the good loans start defaulting that remains at Abil? Do you have another R20 billion handy? Government structures do not have a good track record when it comes to collecting debt. Tax, maybe. But I think the municipal and electrical billions outstanding proves my point. By bailing them out, you are gambling with the future of the ZAR and our healthy banks. Their shareprice will suffer long still. Let's hope Moodys and Fitch don't connect the dots between public and private debt, just yet.

      Magane Nchabeleng - 2014-08-10 17:19

      Can those who owe African Bank start to celebrate ?

      Bruce Gatland - 2014-08-10 17:45

      Why should us, endangered species taxpayers, once again have to foot the bill for a banker's corrupt folly? Gill is a communist, the international markets shun communists, so the downgrade is inevitable. What do communists know about markets? Nothing.

  • Juan Oosthuizen - 2014-08-10 17:16

    capitec is next.....

      Lungi Mtshali - 2014-08-10 17:36

      That is a very ill-informed statement, Capitec moved from providing mainly unsecured lending towards being a bank, meaning they accept deposits and offer savings options to their customers! Totally different business models.

      Sibusiso Teabag Makamole - 2014-08-10 17:40

      Capitec is not focusing only on loans but they are generating income from transactions inside. I suggest you visit their website and get your facts rights before insulting white people by suggesting that they are all ignorant like you

      Liber Tarian - 2014-08-10 17:54

      No, Juan. Capitec is NOT next. You clearly don't know the difference between the two.

      Lwando Barayi - 2014-08-10 18:04

      To those who are so sure about Capitec, does PEP bank ring a bell?

      Jason Cotton - 2014-08-10 20:49

      Capitec brass have reduced their exposure by selling massive amounts of shares - see business day article. Another little trick they have up their sleeves is that depositors cannot withdraw large amounts of cash. I tried withdrawing R100k and was told to transfer this amount to ANOTHER bank via internet banking (Capitec limit is R10k per day!). I suspect if/when the bad news comes this is a good mechanism to stave of a run on the bank - simply choke the online banking system if there are signs of a run.

      Justin Pretorius - 2014-08-11 09:08

      Totally wrong juan

  • Sibusiso Teabag Makamole - 2014-08-10 17:24

    For me i say this is a good time to buy shares. The bank was messed up by EHL and its reckless lending. I mean anyone can get a loan to buy furniture from them and clients lied about their expenses so that they can get the furniture since the loan is unsecured. I believe the bank will bounce back

      Hezekiel Madidimalo Mamadi - 2014-08-10 17:28

      you sure they even have their offices in every EHL stores

      Sibusiso Teabag Makamole - 2014-08-10 17:35

      Yes, a person earning 5000 qualified for a loan of more that 60 000 because they simply lied about their living expenditures. Person takes the loan and month end changes his banking details and then the bank can not collect the money. They need some other form of income apart from interest from the loans

  • Abongile S. Ngozi - 2014-08-10 17:33

    Habashwe

  • Herklaas Jantjies - 2014-08-10 17:44

    A big bail out

  • Theo Vywer - 2014-08-10 17:44

    I want to cry, I wanted to buy the shares and go long in anticipation of a move like this from SARB but I had no access to funds.

      Bruce Gatland - 2014-08-10 17:51

      Theo, you must be crazy. If it's too good to be true, ...................

      Theo Vywer - 2014-08-10 17:58

      Nothing about this is to good to be true Bruce, I knew the reserve bank was going to pull a move like this. Letting ABIL go under would have been disastrous. Just watch ABIL shares recover starting tomorrow. This is BIG move by SARB, but just cause its big does not mean its too good to be true.

      Victor Cover Mkhaliphi - 2014-08-10 18:05

      Theo I agree with you, if I had cash I was going to buy the shares immediately.

      Bruce Gatland - 2014-08-10 18:11

      Theo, allowing ABIL to trade with usary interest rates to the impoverished was the disaster. Giving unsecured loans and relying on the garnishee system to get rich is the criminal disaster. ABIL should not be allowed to continue trading, but the GEPF (government employees pension fund) is the biggest single investor in the crooked, stinking ABIL ripp-off scheme, so of course Marcus the ANC/SACP functionaire has been instructed by Luthuli house to do something about it. What can she do? All she can do is chuck some capitalist taxpayers money at the problem by bailing this banking whorehouse out. Buy shares in this corrupt cesspool of financial abuse, and you give up your human decency.

      Theo Vywer - 2014-08-10 18:18

      Bruce I am not gonna argue the points you raise, they are not the essence of my argument. My point is, when this saga started, I knew the right move from a share trader perspective was to short sell, and when the share price reached 30 cents I knew the right move was to buy the shares and hold them for a medium to long period as I anticipated what the SARB will do. This move will cause the share price to recover.

      Bruce Gatland - 2014-08-10 18:34

      Theo, Lending money to poor people for discretionary spending and then relying on the corrupt garnishee system and usary interest rates as ABIL does, is a national iniquity. Would you buy shares in a brothel, just because you can make quick money? I suspect you probably would not.

  • Grant Durban - 2014-08-10 17:45

    Ignorant statement Juan

  • Loopz Madiseng - 2014-08-10 17:49

    hOw much are the African bank shares worth after all this madness? This disaster might turn-out to be a good investment risk

      Bruce Gatland - 2014-08-10 17:52

      It will fold within a month, and take billions from taxpayers, again........ Marcus is a communist and therefore an economic idiot.

      Sibusiso Teabag Makamole - 2014-08-10 17:56

      Ha ha ha am also thinking of buying these shares. They were last trading at 20c

      Liber Tarian - 2014-08-10 18:02

      Actually, Bruce, Abil generated c. R 11b during their interims. I've alluded to the fact before that it's their older loans which have gone bad. Their impairment process was also flawed. I totally disagree with a bailout, and that's coming from a current shareholder. My question to you: Why will it fold in a month?

      Bruce Gatland - 2014-08-10 18:20

      Theo, I know exactly what I am talking about. I have spent my life investing in honest, hard-working innovative businesses. I don't take part in get rich schemes, and I don't abuse the poor and desparate, which you seem to have no problem with..

      Bruce Gatland - 2014-08-10 18:25

      Liber Tarian, If you haven't noticed, but for a governement (taxpayers) bailout, ABIL has already folded. Share price dropped 98.5% in one week. Businesses require customer and shareholder confidence to survive - ABIL has lost both of these. We will see the closing down of African Bank by the end of September this year.

      Thato Phadi - 2014-08-10 18:40

      With more than 3 million share traded. Some investors have taken a risk that will pay off in a couple of years. So how's that for confidence in the futute of the bank

      Bruce Gatland - 2014-08-10 18:50

      Thato, There's an old truism - a fool his money are soon parted.

      Clayton Hotten Stiemie - 2014-08-10 18:54

      Trading will be suspended.

      Theo Vywer - 2014-08-10 18:59

      Bruce I apologise, I though our different views stem from a lack of understanding of financial markets on your part. Now I see its that you disapprove of ABIL's business model. For the record I do too, I disapprove of this bail out but it is what it is and I might as well make money out of it.

      Bruce Gatland - 2014-08-10 19:02

      Then Theo, You appear to be an investment slut. Good luck to you.

      Liber Tarian - 2014-08-10 22:43

      Bruce, you're not getting it, with respect. For a business to be shut down, it has to be, well, just that...shut down. Whether we like a bail out or not (which I don't, and as I said, as a current shareholder), it is happening. GM in the US filed for Chapter 11 and you can still buy yourself a Chev today. It was never shut down but Detroit is still licking its wounds. This is the new age we live in...perpetual bliss, or delusions thereof until reality kicks in.

      Bruce Gatland - 2014-08-10 23:45

      Liber, Please don't compare GM with African Bank. GM produced an acual tangible product, African bank never have.

      MK - 2014-08-11 00:43

      Bruce I admire you. I don't see why other people can't have the vision that making money of money has no benefit. Whereby stimulating business growth, with a share of the profits helps the person sharing in the profit make money so he doesn't have to take interest loans, also he appreciates the money more because he worked for it. Unfortunately people don't have the vision to see that. I take my hat off to you Bruce, may god bless you for empowering people through hard work and rewards. Interest should be banned, but the banks will never allow that, greedy swines.

      Liber Tarian - 2014-08-11 21:35

      So, Bruce. You have obviously never borrowed money before?

  • Dumi C-Bam - 2014-08-10 17:55

    This is why loan sharks take bank cards and ID books, its not very legal but effective. You don't see loan sharks going out of business

      Sibusiso Teabag Makamole - 2014-08-10 18:03

      ha ha ha yoh thats a good one boss

  • Warren Wepener - 2014-08-10 18:00

    Capitec is next people open accounts then get a loan then jump ship the employers will tell you. Their salaries get paid into the Capitec/African bank the next moment they change banks and the salaries must be paid into the next bank

      Liber Tarian - 2014-08-10 18:06

      Suggest you delete your comment before you embarrass yourself.

      Theo Vywer - 2014-08-10 18:08

      If I had time I would reply on a lot of comments starting with this one, just telling people they don't know what they are talking about.

  • Thato Phadi - 2014-08-10 18:07

    You got to be joking. More than 3 million shares were traded on wednesday. I should have bought those shares when they were at there lowest. This just killed my mood

  • Mashai Joannes - 2014-08-10 18:10

    I don't really agree with how african bank conducted their business but we must remember that this is a bank which helped many south africans in fulfilling their short and long term goals thanks to their risk lendings.I wonder y african executives and financial advisors didn't anticipate this catastrophe.overall its collapse is going to prove disastrous to many south africans who got a loan without ever going all the bothersome processes.I hope the government can intervene and restructure their lending procedures.

      philip.buys.1 - 2014-08-10 18:38

      that is why the reserve bank is trying to help.

      Bruce Gatland - 2014-08-10 18:53

      Mashai, Why "lend" money to somone who has no way of paying back? If you want to "help many south africans in fulfilling their short and long term goals" and you know thet can't afford to pay it back, if you are really such a nice guy, just give them the money and expect nothing in return. Do you see how stupid your argument is?

      Bruce Gatland - 2014-08-10 18:59

      Philip, The "government" in the form of communist Gill Marcus from SARB is only intervening because they want to save the Government employee's pension fund from taking a major financial hit - and they don't want a further rating agencies downgrade. It has nothing to do with "government" being "nice"

      MK - 2014-08-11 00:35

      You mad, interest doesn't empower people. It's give them a false sense of empowerment.

  • dan.butler.7967 - 2014-08-10 18:10

    How does a bank get so deep in trouble before actioning?

      joe.dow.5203 - 2014-08-10 18:18

      Qwabe, I do not think you know anything. Look at all the corrupted, non-functioning municipalities running by blacks. Rather stick to topics that are not beyond your understanding.

      philip.buys.1 - 2014-08-10 18:36

      @qwabe, not to mention the useless loan repaying tactics of the majority black loans... tit for tat.

  • E De Klerk - 2014-08-10 18:11

    This is a worrying decision. The National Payment system act initially tried to circumvent this sort of action by using taxpayers money to support reckless management actions at Banks. The reasoning behind that was that if Bankers know there is a "big nanny" down the line who will come to their rescue, why be prudent in there lending decisions? They will be bailed out in case of distaster. This has now happened. The directors as well as shareholders are responsible and should carry the can. Not taxpayers. Lehman Bros in America is an example here of this. Let the thing go bust. That is the real world. But my suspicion is that the so called shareholder namely the Government pension fund, did not play their judiciary role as shareholder and now pushes their incompetence onto the taxpayer under the umbrella of nice sounding terminology. African Bank is not a risk to the banking system as such. It is a small niche player. Good governance did not prevail I am afraid.

      Tanya Dixon - 2014-08-10 18:27

      Yip ye old Moral Hazard at play

      philip.buys.1 - 2014-08-10 18:34

      And i bet his pension fund is not invested in it, or so he thinks.

      MK - 2014-08-11 00:33

      100% correct. Greed prevailed if anything.

  • Thato Phadi - 2014-08-10 18:34

    Reading some off the comments, people always seem to bring colour into everything. Colour has nothing to do with problems facing African bank. Please racist minority of blacks and white not everything is about racism. Engage us properly as educated South Africans who have interest about what's happening in the world of business and world economy. You. Probably don't even know what's GDP

      Chris Els - 2014-08-10 19:10

      Thank you well said.

  • Valene Reddy - 2014-08-10 18:37

    its going to be a long road but i think based on the below consortium offering a cash injection, technical and management support the bank as a possibility to survive. A consortium has been put together by the private sector. The consortium comprises Absa Bank Limited, Capitec Bank, FirstRand Bank Limited, Investec Bank Limited, Nedbank Limited, Standard Bank Limited, and the Public Investment Corporation (PIC). The consortium has committed to underwrite a R 10-billion capital raising, and will – under the guidance of Mr Winterboer – be engaging with shareholders and other interested parties in this regard. Members of the consortium have also offered to provide management and technical support.

      Rolene Nel - 2014-08-11 00:29

      Thank you for being informative.

      Rolene Nel - 2014-08-11 00:29

      Thank you for being informative.

      MK - 2014-08-11 00:32

      It's sad we as a country are promoting interest. This system only makes the rich richer and the poor poorer. It's also de-stimulates growth, gives the borrower a false sense of happiness and contentment. Interest should he banned period. A sad day for this country.

      Reality - 2014-08-11 07:13

      HOWEVER.... "Sarb will purchase a substantial portion of the non- and under-performing assets and other high risk loans from Abil in order to separate them from the good bank," said Marcus. So, the taxpayer will purchase the non- and under-performing assets while the consortium walks away with the spoils?

  • Monica Kieck - 2014-08-10 18:37

    Is Capital Bank next? Directors sold their shares?

      Sibusiso Teabag Makamole - 2014-08-10 18:48

      Capital bank? which one is that?

  • Carl Botha - 2014-08-10 18:42

    They should sell African Bank to BRICK Bank!

  • philip.buys.1 - 2014-08-10 18:45

    Exactly the moment in time, Warren Buffet bought Bank of America and a bigger stake in Wells Fargo, 7 years ago. He is making billions out of that.

  • Mpho David Rambuda - 2014-08-10 18:52

    How does the reserve bank hope to get retrenched people to meet their payment obligations that Abil failed. All of these loans require people to take all sorts of insurance services, but it does seem most of these insurances are not for as they are sold by the loan sharks themselves. If SARB was doing its job, taxpayers wouldn't be having to bail out this loan shark.

      Daniel Spengler - 2014-08-11 13:45

      They don't. The reserve bank is trying to save as much of African bank as they can. If African bank fails completely, a lot of people with savings and investments there will be SOL. South Africa does not have a large enough safety net to ensure that those people would be able to get back on their feet in the event of complete failure. The reserve bank is trying to limit and contain damage as much as possible. Gill Marcus and co. are doing an excellent job of making the best of a bad situation.

  • Monica Kieck - 2014-08-10 18:57

    Is Capitec Bank Next? Directors sold their shares?

  • Owen Walker - 2014-08-10 18:59

    This is just the start, South Africans have a culture of non payment and the shrinking formal business base can no longer hold up the rest.

      Theo Vywer - 2014-08-10 19:04

      South African business have a habit of giving credit to people who aren't creditworthy

  • Lerato Rato - 2014-08-10 19:04

    That's BBE .if they can go deeper they can find that zoomers family is involved.

  • Indjun - 2014-08-10 19:09

    The handsome woman raised the interest rates and is now dealing with the consequences... Commie

      michael.tetley.35 - 2014-08-10 19:21

      ABIL was in trouble long before the interest rate increase you idiot. Read the financial pages some time.

      Maree Clarkson - 2014-08-15 13:13

      the interest rate should be raised more to stop all the lending and to encourage people to save!!

  • Sipho Simon Mogale - 2014-08-10 19:11

    sa has habbit of bad payers

  • Nathi Ntshobodwana - 2014-08-10 19:14

    Playing as a sole creditor and owner to the Ellerines Group was the downfall of Abil.... They have been walking on thin ice for quite some time. The relationship between the funiture and unsecured loan banking unit has to be restructured if the bank has to be salvaged from its present position. Abil drove its reckless lending processes to its funiture business acquiring more deliquents to its loan book in the process. We hope things will get better as time goes on with this curatorship.

  • Molefi Leviy Motshabi - 2014-08-10 19:27

    is this caused by irresponsible lending or is there something else going on behind scenes?

      Debbie Dutton - 2014-08-11 04:42

      Probably irresponsible lending... other banks have also fallen prey to this in the past, but have had other portfolio's to offset their bad debt. People are in debt... and they are not able to pay back their loans. Scary.

  • Thobi Milano Pheto - 2014-08-10 19:53

    Now ask yourself governor was it not a bit early for increasing the repo rate ?

      Daniel Spengler - 2014-08-11 13:49

      Raising interest rates was a tough call. Lowering interest rates would mean that inflation would go up, people would get deeper into debt and that fixing things would be much more painful and take far longer.

      Maree Clarkson - 2014-08-15 13:15

      It's on the cards, two more interest hikes coming - yay!!

  • willem.ras - 2014-08-10 19:59

    Well done SARB! We don't see banks defaulting often and it is good to see Gill Marcus demonstrate leadership!

  • Jacqui Cameron Baumgardt - 2014-08-10 20:09

    South African government owned bank coming up

  • Mobeena Hoosen - 2014-08-10 20:12

    One of our major problems in this country is our socio economic factors. And for all you racist Idiots, it has nothing to do with race. It may seem that way but before you judge always remember we live in a country of an African majority.

  • Michael Van Heerden - 2014-08-10 21:18

    Lending money to people so that that they can buy basic goods that do not retain their value has been a disaster since this 'banking' principle was created.it only works if a baseball bat comes as standard procedure for payment collection. This is pure simple greed on the bankers part - the high interest rate on the loan and the desperate consumer makes this an unholy cocktail that always ends in tears for all - including the tax payer who must now bail out the 'system' to keep up appearances !!!

      Les Dyason - 2014-08-10 21:36

      I think sarb has a plan. Hold on there. Guys and dolls If I had (spare) money, I certainly would have Taken a chance on African Bank. Government will be best advised to steer any business they are able to! to African Bank. My friend Graham says ; It once worked, why not again? Normally just needs fresh management. No office, but Baas Riaan Capitec bank may né worth getting on board, as well. I never dealt with them, but it seems that African Bank filled a usefull gap...?

  • Kobus Gertenbach - 2014-08-10 21:58

    What African bank has done over the last decade is nothing more than a crime against SA society. They have ruined the financial livelyhood of millions of salary earning South Africans by extending massive amounts of credit to them at exorbitant interest rates where they have no hope of ever repaying. They have unknowingly been put on a mouse wheel of never ending payments. This is not the new SA so many people have fought for. African Bank should be closed down and the NCA updated to never allow anybody to ever extort our country's citizens like this ever again.

      MK - 2014-08-11 00:24

      Thumbs up to you Kobus, you cudn't have put it better. It's a never ending cycle for these people, where the rich get richer without having to work because they lending money and making money of that money at the poor's expense who work for them effectively. A wretched system, I fear for our country and the leaders because of their stupidity to help ABIL survive. This was a good opportunity to kill of this habit. It just shows, the banks and their stupidity system of interest are the real enemies.

      Marius Francois de Wet - 2014-08-13 13:31

      I agree with you Kobus Gertenbach my father was granted credit on his pension when he was battling. They first granted him a small loan that was sort of reasonable, but then they encouraged him to extend the loan again and again and again which at the age of 76 he did, not fully understanding the ramifications of the after effects. Now I sit with the responsibility of feeding my elderly folks as they don't even have money left over to buy food. The repayments are exorbitant and my folks are now financially destitute. After the Instalments and existing accounts are paid my Parents are left with approximately R450 to cover groceries and Water and lights for the month. I am now under major strain to help and I am battling now. I cant understand how they granted my father a loan and carried on extending the Loan????? He now has a loan of R 150 000-00 which he now makes payments of R 6 000-00/month which he definitely cannot afford. He only has about R 6 540-00 after accounts are debited. The R 6 540-00 is supposed to pay Water and Lights and Groceries. But Thanks to his Instalments that is not possible. WHAT DO I DO??????

      Maree Clarkson - 2014-08-15 13:19

      Kobus, why are you blaming the bank for their lending practice? Surely people are grown up enough to know what they're doing and getting themselves into? The blame rests squarely on the shoulders of those who took out the loans. People should take responsibility for their behaviour and not try and find a scape goat.

  • Nqobile Mahlangu - 2014-08-10 22:14

    The main thing... is to keep the main thing; the main thing... in the business world, no personal decisions are entertained, neither racism Must be encounted if unity plays a vital role throughout... unless there's a stone left unturned...

      MK - 2014-08-11 00:25

      What are you talking about my friend?

      Maree Clarkson - 2014-08-15 13:20

      Ha ha ha! What drivel!

  • Ron Beuke - 2014-08-11 06:56

    And the taxpayer has to save the government's ar$e again..

      Valery Fuller - 2014-08-12 20:27

      Cannot belief that SA is reasoning as if a other country have been rescued.Abil's clientele is your frienf,brother,sister and housekeeper.Leon Kikirnis is the best!!!!It was his VISION to help those who nobody want's to help.Give back their moral and credibility.The poor will always be amongst us we cannot turn a blind eye.Fellow South Africans.CHANGE is POSSIBLE,PROFITABLE and PERSONAL.Realy need to change the way of thinking.And remember it is Womans Month!!!Thank you Me Gill Marcus and Team!!You have done a great job!!! Long live African Bank!!!

  • Mopedi Wamakgonthe - 2014-08-11 08:41

    So we the "good" tax payers are paying for the "bad" book... and the banks are also going to increase their rates - either way , its not looking good for us as tax payers

  • Justin Pretorius - 2014-08-11 09:05

    Taxpayers have to bail them out for reckless lending

      Esme Munzhedzi - 2014-08-11 17:18

      Oh Gosh, we've been singing the whole day that reserve bank is privately owned and the government can't afford 2 watch Abil as a business that contribute 2 this country's economy going down as more than 11 000 ppl will lose their jobs so if there is something they can do 2 assist the bank they can surely do it like other big banks r willing 2 assist.

  • Havalarf Allday - 2014-08-11 09:20

    African Sank. Eish.

  • Francois Phillip van Zyl - 2014-08-11 11:54

    @Dimitar Kostov... All is fine for a free market system, but WE as citizens of this country, employees of the bank & depositors & sharehoulders also EXPECT that our government & reserve bank jump in to help when one of our banks want to go bust. That is the support we expect from SOMEONE to at least try & help us..... and it is being offered. We could have sat back & let the bank completely fold.... Thousands of people lose their jobs, dependants of those employees not have food on the table, investors loose investments as well & have the whole banking sector in a flurry, but no, someone was willing to do SOMETHING. The big boss at the top, who initially created the African Bank model disastrous model, also resigned.... also a good step in the right direction. Now, lets see if the bank can be turned around, people can keep their jobs and the sector as a whole will move forward.

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