SA youth in the forefront of buying African Bank

As the SA Reserve Bank (SARB) moves closer to selling its 50% stake in African Bank Limited, South African business entities have shown considerable interest in acquiring one of the country’s oldest black-owned financial institutions.

Valued at over R28 billion, the African Bank is a retail financial institution offering commercial products and services.

The SARB bought African Bank shares to save the bank from collapsing after it and its parent company, African Bank Investment Limited, was placed under curatorship in 2014, due to a soaring bad debt.

In saving the African Bank from a collapse, the SARB made its intentions clear, of not holding the bank’s stake over a long time – avoiding a potential conflict of interest between its role as a regulator of the bank and as a major shareholder.

For African Bank to come out of curatorship and to trade again, SARB, together with the Government Employees’ Pension Fund (GEPF) and a consortium of local banks, made up of FirstRand Bank, Standard Bank, Absa, Nedbank, Capitec and Investec, injected R10 billion to African Bank.

The SARB provided R7 billion to buy the bank’s bad loan book. The GEPF owns 25% and the banks’ consortium holds the remaining 25%.

“The SARB has received interest in African Bank through the expression of interest process, which closed on 2 July 2021,” said spokesperson Thoraya Pandy.

“The transaction advisors have been collating these and are assessing all the applications received,” added Pandy.

The SARB acquired the stake in 2016 as part of the restructuring of African Bank after it was placed under curatorship.

Among many who have shown interest in acquiring the SARB is NDAX – a Gauteng-based national digital payments financial assets exchange, member of BRICS Business Council: Financial Services Working Group – mostly made up of young South Africans.

“As young people we have raised our have hands as this is a once in a lifetime opportunity for the youth of South Africa.

“NDAX has assembled a management team that comprises a unique set of skills and experience.

“This includes investment, retail banking, actuarial, legal and general business skills,” said NDAX founder and CEO Trevor Tambo.

Outlining the NDAX interest in African Bank, Tambo said the group wished to preserve the legacy of the bank’s founding fathers and pioneers – Dr Richard Maponya, Dr Sam Motsuenyane, Reverend Joe Hlongwane and Archie Nkonyeni.

Said Tambo: “The idea of a black owned and controlled bank came from Nafcoc’s inaugural conference in 1964, where it was noted that black business people received little or no support from white-owned banks.”

Among experts forming part of the NDAX team is veteran broadcaster and communications expert Lunga Williams, who has been appointed chief communications officer.

“The SARB’s divestiture of its shareholding in African Bank presents a unique opportunity and a platform for black people to have a presence in the banking and financial services sphere, through which they may participate meaningfully in the economy,” said Williams.

Writing in the Business Day, Leteka Radebe, president of the Association of Black Securities and Investment Professionals, said the African Bank needed black shareholders.

Said Radebe: “With many black South Africans now in a position to again galvanise their resources into another stokvel or savings club, we have an opportunity to broaden the base of ownership of African Bank – ensuring that it goes back into the hands of black people.

“This was the vision of its original founders and we believe pioneers such as Dr Sam Motsuenyane, would have loved to live to see its return to black people.

“It is time to be creative and innovative around how we take the opportunity to own the bank again through various broad-based structures such as retail offerings.

“Missing an opportunity of this scale will mean the national transformation agenda will linger on in the corridors of lethargy for longer than necessary.”

-brians@citizen.co.za