THE South African Reserve Bank (SARB) said on Monday it has placed lender Ubank under a curatorship, with immediate effect.
The SARB has appointed KPMG South Africa as the administrator of Ubank, which remains open for business and is highly liquid, central bank governor Lesetja Kganyago said in a virtual briefing.
Kganyago announced that KPMG has been appointed curator of the bank, which has total assets of just over R5.2 billion.
Ubank, which is linked to the mining sector unions, is a 100% black-owned South African bank.
Most of its clients are either mining workers or people from underserviced communities.
“Ubank is a bank, duly registered as such in terms of the provisions of the Banks Act 94 of 1990, which means that it falls under the supervisory and regulatory ambit of the Prudential Authority,” Kganyago said.
“The bank has a long history of providing basic financial services to mine workers and their families. The Financial Sector Regulation Act 9 of 2017 mandates the Prudential Authority to [A] promote and enhance the safety and soundness of financial institutions that provide financial products; and [B] protect financial customers against the risk that that those financial institutions may fail to meet their obligations.”
Kganyago said the injection of new capital was needed for Ubank to comply with the minimum capital requirements, to diversify the bank’s business model and to ensure the future sustainability of the bank.
“After having duly considered the seriousness of the issues facing the bank, and given that Ubank is unlikely to immediately meet its obligations as required by the Banks Act and the regulations relating to banks, the Minister of Finance, in consultation with the Prudential Authority, has decided to place Ubank under curatorship with immediate effect,” he said.
“This is being done to proactively mitigate the adverse consequences on Ubank’s depositors, and to preserve the stability of the South African banking and financial services sector as a whole.”
Kganyago said that Minister of Finance Enoch Godongwana has appointed KPMG South Africa as the curator of Ubank, with KPMG director Zola Beseti as the representative to lead the curatorship.