Abil collecting $230m of debt a month

JOHANNESBURG (Reuters) – Failed South African lender African Bank Investments is collecting around $230 million of debt a month and has applied for a new banking licence as a step towards re-listing, its government-appointed supervisor said on Wednesday.

African Bank, known as Abil, was rescued by the central bank in August after it was hit by a flood of bad debts as its core market of low-income borrowers failed to repay loans.

It has continued to collect debt and write new loans under the supervision of Pricewaterhouse Coopers executive Tom Winterboer, who was appointed by the central bank to lead Abil's overhaul.

Abil has been collecting around 2.5 billion rand ($230 million) a month, Winterboer told CNBC Africa in an interview.

"The collections are at least as good as we expected, and have even been slightly above," he said.

The central bank initially said it would buy 17 billion rand of bad loans for 7 billion rand. However, Winterboer said he now he believes those loans were collectible and Abil would instead take a 7 billion rand facility from the central bank and keep the bad debt book itself.

Abil, which has 29 billion rand in assets, is on track to re-list on the Johannesburg exchange by around March, he said, adding he hoped to have a new board in place by next month.

"We've actually submitted a new banking application for a new licence, for the good bank. That went in yesterday."

The bank's loan volume for October is likely to be as much as 680 million rand, Winterboer said.

Finance Minister Nhlanhla Nene said last week he expected the bank to re-list early next year, adding that its government supervision would be concluded without the use of taxpayer money.

The central bank has also launched an investigation into Abil and its former management to determine if the bank engaged in reckless conduct or questionable practices.

($1 = 10.9290 South African rand)

(Reporting by David Dolan, editing by David Evans)