The collapse of African Bank Investments Ltd. and the subsequent report into what caused the lender to fail has prompted South Africa’s banking regulator to review its oversight 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 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 in August 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 submitted his report to the regulator by the end of the first quarter, it hasn’t been made public.
“The Myburgh report is confidential,” Kuben Naidoo, deputy governor of the central bank, said in the presentation to reporters in Johannesburg. “We will take a view, with the Minister of Finance, as to whether to release the report or parts of the report in time.”
The regulator stepped up its contact with African Bank at the end of 2012, the central bank said in its report Tuesday. The lender was encouraged to amend impairment and provisioning policies, address its rapid credit growth and reconsider its business model in 2013 and 2014, the report shows.
“The Myburgh report is a big report, we are working through it,” Rene van Wyk, the registrar of banks, said in the same presentation. “We are satisfied with African Bank’s curatorship. The curator has stabilized the environment.”
African Bank is applying for a new banking license and may arrange an initial public offering next year. It is due to release results for the fiscal year ended September on May 28.