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African Bank collecting R2.5bn debt a month - curator

Johannesburg - Failed lender African Bank Investments is collecting around R2.5bn of debt a month and has applied for a new banking licence as a step towards re-listing, its government-appointed supervisor said on Wednesday.

African Bank, known as Abil, was rescued by the South African Reserve Bank (Sarb) in August after it was hit by a flood of bad debts as its core market of low-income borrowers failed to repay loans.

READ: African Bank expects R6.4bn loss, CEO quits

It has continued to collect debt and write new loans under the supervision of Pricewaterhouse Coopers executive Tom Winterboer, who was appointed by Sarb to lead Abil's overhaul.

READ: Nene: Abil shows tightened financial control

Abil has been collecting around R2.5bn a month, Winterboer told CNBC Africa in an interview.

"The collections are at least as good as we expected, and have even been slightly above," he said.

The Reserve Bank initially said it would buy R17bn of bad loans for R7bn. However, Winterboer said he now he believes those loans are collectible and Abil would instead take a R7bn facility from Sarb and keep the bad debt book itself.

Abil, which has R29bn in assets, is on track to re-list on the Johannesburg exchange by around March, he said, adding he hoped to have a new board in place by next month.

READ: Abil plans to re-list on the JSE

"We've actually submitted a new banking application for a new licence, for the good bank. That went in yesterday."

The bank's loan volume for October is likely to be as much as R680m, Winterboer said.

Finance Minister Nhlanhla Nene said last week he expects the bank to re-list early next year, adding that its government supervision would be concluded without the use of taxpayer money.

Sarb has also launched an investigation into Abil and its former management to determine if the bank engaged in reckless conduct or questionable practices.

READ: Sarb to investigate failed Abil

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