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Johannesburg - The SA Reserve Bank (Sarb) has launched an investigation into failed lender African Bank Investments [JSE:ABL] to determine if it engaged in reckless conduct or questionable management practices, Sarb said on Tuesday.
African Bank Investments, known as Abil, was rescued in a $1.6bn bailout led by Sarb last month, after the unsecured lender was hit by waves of bad debt.
A consortium involving major banks will inject R10bn into Abil said governor Gill Marcus when she announced the curatorship.
"The consortium has committed to underwrite a R10bn capital raising, and will be engaging with shareholders and other participants in this regard," said Marcus.
The consortium comprises Absa Bank Limited, Capitec Bank, FirstRand Bank Limited, Investec Bank Limited, Nedbank Limited, Standard Bank Limited and the Public Investment Corporation.
She said that private/public sector partnership would lead to Abil splitting into two.
"On one hand a good bank, which will be recapitalised. Let me emphasise that the R10bn recapitalisation is for the good bank which has a book value of R26bn net of portfolio impairments," said Marcus.
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