Good Bye African Bank – Hello African Bank
African Bank Open For business in April
When African Bank shares took their dramatic tumble into the dirt, the bank was put into curatorship in an effort to salvage something out of the giant, after years of trading and building a strong brand. Mr Tom Winterboer took control and soon it was announced that African Bank would be split into Good Bank and…not so good bank.
The “not so good bank” has now been called Residual Debt Services and the “Good Bank” is being rebranded as African Bank. Due to some very fancy legal paper shuffling the all new African Bank will have none of the old bank’s bad debt but still act as it’s agent to collect on the many bad debts allocated to it. Please note that the old bad bank debt which is lumped into Residual Debt Services will not be operating as a bank, though they will continue to be a registered credit provider. This entity is still under curatorship.
New African Bank
The new African Bank has an equity base of R10 Billion and a Cash position of a whopping R24 Billion. This should see it able to raise additional funds to expand and continue to trade over the next couple of years.
African Bank will be tying in with Sanlam to offer consumers more insurance products in an effort to push up profitability. Stricter affordability assessment regulations should also see a reduction in possible reckless lending allegations. the bank has stated they wish to move toward a more retail focused business as opposed to heavily focussing on unsecured lending as in the past.
The bank will operate out of around 400 branches country wise and if consumers don’t really think about it too much it will almost be as if nothing ever happened. While consumers may feel this way it is unclear what investors will think.
Parliament Calls For Blood
The newly branded African Bank began operating this month with Mr Winterboer handing over control of Good Bank to new African Bank CEO Mr Brain Riley. This in the midst of calls from parliamentary parties against the National Credit Regulator demanding some sort of accountability from former African Bank management who, they say, have gotten away with gross abuses of their positions and have not been held accountable for the factors leading to it’s crash.
It was good to see that the company did not fall for the, oh so easy, trap of beginning operations on the first of the month.