An update on the Curatorship and restructuring of African Bank as well as a further cautionary announcement and the continued suspension of all debt and equity securities of ABIL has been released via the Stock Exchange News Service. Highlights from the announcement outline the details below:
Curatorship Update
- 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.
- Total monthly disbursements have varied between R550 million and R750 million between August 2014 and January 2015, in line with the lower risk appetite and expectations.
- This level of disbursement is below the long-term sustainable level for the core bank targeted to create the new “Good Bank”, and efforts continue to target improved, risk appropriate and profitable disbursements.
- Total monthly collections have varied between R2,075 million and R2,475 million between August 2014 and January 2015.
- Given the relative stability achieved since the Curatorship began, one aspect of the Bank’s executive team’s focus has been on deriving improved efficiencies for the Bank’s business as it moves towards its anticipated new phase within Good Bank, with, at least initially, a lower level of activity than that undertaken by African Bank prior to Curatorship. A review of the organisational structure of the workforce has therefore been undertaken in order to realise some of these efficiencies.
- As a direct result of this, the Bank’s management has embarked on a consultation process for the re-deployment or retrenchment of some 50 non-union management level staff members, currently employed at the Bank’s central office in Midrand. In due course redeployment consultations across the wider Bank may be considered as a means to achieving some of the intended improved efficiencies.
Appointment of Acting Good Bank Chairman Designate
- The Curator is pleased to announce the appointment of Mr. Louis von Zeuner (53) as Chairman designate to Good Bank.
- Louis has worked closely with the Curator on African Bank since August 2014 and will continue to operate in an advisory capacity to the Curator until the anticipated Good Bank operation is established.
- Louis retired from Absa Group Limited as Deputy Group Chief Executive in December 2012 after 32 years in its employ. He has accumulated a wealth of in-depth knowledge of the South African banking industry over the years, including holding directorships in Absa Group Limited, Absa Financial Services and the Banking Association of South Africa. Previously, Louis headed up the Retail and Business Banking at Absa and was part of the team to develop and lead Absa’s strategy for 2000. Louis served on a number of committees while at Absa, including the Group Investment, Audit and Compliance, Finance and the Human Resources and Remuneration Committees.
Restructuring Proposal
- It is expected that the Curator will provide an Information Memorandum (“IM”) to the affected parties detailing the intended restructuring approach to African Bank, towards the beginning of May 2015. The IM will be made publicly available and its expected publication date and outline will be communicated in a SENS announcement in due course.
- The IM is intended to inform affected parties of the proposed restructuring of African Bank, including details of anticipated offers to affected creditors and other parties, the financial information supporting the anticipated approach and details of the alternative approaches assessed and rationale for following the anticipated approach the optimal approach in the circumstances.
For further detail on the restructuring proposal, click here for the full SENS announcement.
Banks Act Amendment Bill, 2014
- The Banks Act Amendment Bill, 2014, (“the Bill”) was presented to the Parliamentary Finance Committee and commented on by various interested parties on 3 and 4 February 2015. It is anticipated that the next parliamentary committee hearing on the proposed Bill will take place in the middle of March 2015.
- The successful restructuring of African Bank, as is currently envisaged, is dependent on the passing into law of the Bill.
Publication of the audited financial results for the year ended 30 September 2014 and the reviewed financial results for the six months ended 31 March 2015
- African Bank expects to provide the annual financial results and audited financial statements for the financial year ended 30 September 2014 during April 2015.
- Further to the SENS announcement of 23 December 2014, the Board of ABIL regrets to announce that it now expects to publish the annual financial results and the audited financial statements for the financial year ended 30 September 2014, during May 2015 and not during the first quarter of calendar 2015 as previously stated.
- While significant progress has been made in dealing with and finalising the complexities referred to in the SENS announcement of 23 December 2014 (Further business update and timing on the release of ABIL’s audited results for the financial year ended 30 September 2014), specific complexities among others, related to changes in accounting policies related to African Bank require further attention which has caused the further delay in the publication of the group audited financial statements.
- The Curator and the Board of ABIL expect to be able to release the reviewed results for the six months ended 31 March 2015 during June 2015.
Further cautionary announcement and continued suspension of all debt securities of African Bank and all equity securities of ABIL During this time, trading in both the debt securities of the Bank and the equity securities of ABIL will continue to remain suspended.
Investors are therefore advised to continue to exercise caution when dealing in the debt securities of the Bank and the equity securities of ABIL until further detailed announcements are made.
Click here for the full SENS announcement
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