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Johannesburg - The collapse of African Bank Investments in August and the subsequent report into what caused the lender to fail has prompted South Africa’s banking regulator to review its supervisory practices and procedures.
“Following the events leading to African Bank’s curatorship, the department has considered its supervisory practices and procedures with a view to future changes and enhancements,” the South African Reserve Bank’s (Sarb's) bank supervision department said in its 2014 annual report released Tuesday in Johannesburg. The regulator didn’t detail how it will change its systems and processes.
African Bank failed amid record losses and a lack of funding. The central bank stepped in, appointing an administrator to rescue the viable assets and then naming lawyer John Myburgh as a commissioner to investigate the lender’s practices. While Myburgh has submitted his report to the regulator, it hasn’t been made public.
Before African Bank’s collapse, the banking regulator increased its contact with the lender, from the end of 2012. The regulator encouraged African Bank to amend impairment and provisioning policies, address its rapid credit growth and reconsider its business model throughout 2013 and 2014, the report shows.
African Bank is applying for a fresh banking license and may arrange an initial public offering next year. It is due to release results for the fiscal full-year ended September on May 28.
