Hanna Barry
2 minute read
4 Mar 2015
11:20 am

Ex-Absa man heads to Abil

Hanna Barry

Louis von Zeuner, former deputy group chief executive of Absa, has been appointed chairperson designate to African Bank Investment Limited's (Abil) "Good Bank".

Louis von Zeuner. Picture: MoneyWeb.

Having previously headed retail and business banking at Absa, Von Zeuner resigned from his second-in-charge position in December 2012 after 32 years at the bank. He is a non-executive director on the boards of MMI Holdings, Telkom SA and Edcon.

Von Zeuner will officially be named chairperson once a new CEO is appointed and a board constituted.

An Abil spokesperson said the bank’s curators were “making headway” into appointing a CEO and board, but this has not yet been finalised. “This is not a tick-box process. Tom (Winterboer) wants to make sure the board members have skills in various areas,” the spokesperson said.

These appointments will also have to be passed through the South African Reserve Bank (SARB) and the consortium underwriting Abil’s bailout.

Tom Winterboer was appointed curator of African Bank on August 10 2014, days after the bank issued a trading update on August 6 revealing it needed at least R8.5 billion to save the bank from a sea of bad debts. At the same time, it forecast a headline loss of at least R6.4 billion for the year to September 30 and announced the resignation of long-time group CEO Leon Kirkinis.

The SARB promptly placed African Bank under curatorship and announced a R10 billion capital raise underwritten by a consortium of South Africa’s large banks and the Public Investment Corporation.

This was to recapitalise “Good Bank”, which had a book value of R26 billion net of portfolio impairments.

“The bank continues to operate in a stable manner, with loan disbursements and loan collections in line with expectations, albeit that loan disbursements are at lower levels (but higher quality) on a year-on-year basis,” the curator said yesterday.

Monthly disbursements have varied between R550 million and R750 million, “in line with the lower risk appetite and expectations”, the statement said. This is below the stated target of R1 billion a month.

“Efforts continue to target improved, risk appropriate and profitable disbursements,” the statement said, acknowledging this level of disbursement is “below the long-term sustainable level for the core bank targeted to create the new ‘Good Bank'”.

“Total monthly collections have varied between R2.075 million and R2.475 million between August 2014 and January 2015,” the statement said.

Fifty non-union management level staff members, situated at African Bank’s Midrand head office, had been retrenched.

In order for African Bank to be successfully restructured in the way currently envisaged, changes to the Banks Act Amendment Bill are needed. The next parliamentary committee hearing on the Bill – which has received push back from asset managers who fear it gives too much power to administrators of failed lenders to restructure these entities without consulting investors – will take place this month.