The South African Reserve Bank (SARB) has initiated a procedure of appointing an advisor to carry out the sale of its 50% shareholding at the African Bank, six years after injecting R5 billion to rescue it.
African Bank management announced that the central bank had issued a request for a proposal regarding the sale of its stake.
SARB took the African Bank under close monitoring after it nearly collapsed in 2014, owing to the weight of bad loans. The bank was hived off from African Bank Investments when its listed parent began to fail.
As part of the curatorship process, SARB, the Public Investment Corporation and a number of private banks took up a stake and recapitalised the “good” bank, while the worst of its loans was hived off into an entity that is now known as Residual Debt Services.
“It was not the intention of SARB to own the shares for a very long time, but we did want to ensure that the bank was sound and stable before we exit,” SARB deputy governor Kuben Naidoo said at the time.