African Bank Investments Ltd., the lender that collapsed in August, said it has taken action to ensure customers are no longer being charged incorrect interest and fees.
“There are proper processes in place to ensure compliance with the National Credit Act’s requirements,” Tom Winterboer, Johannesburg-based African Bank’s administrator since August, said in an e-mailed response to questions on May 14. A detailed review of the bank, particularly its credit-card unit, began before Winterboer took over and led to “some adjustments, primarily to the customer statements” that were completed by October, he said.
When the lender failed in August, amid record losses and a lack of funding, Winterboer was appointed by the South African central bank to oversee a rescue attempt. Winterboer and his team have since worked on changes to legislation, are applying for a fresh banking license, have found directors for the new bank and may arrange an initial public offering next year. They have also adjusted the way interest is charged so that no customer’s debt increases to more than double the original amount borrowed.
The adjustments that have been made since August will have “limited impact on revenue” and the amount the bank’s loans yield, Winterboer said.
African Bank’s former managers first made changes to interest charges in 2013 that resulted in a 0.5 percent decline in the yield from loans to customers. The bank is due to report its fiscal full-year results for the period ended in September this month.