Earlier this month, Iqbal Survé pledged to BBC members that Sekunjalo would put forward R250 million, under the right conditions, towards rescuing the miners’ bank.
Earlier this month, Iqbal Survé pledged to BBC members that Sekunjalo would put forward R250 million, under the right conditions, towards rescuing the miners’ bank.
By Jamie Roz
Despite a suggestion and offer by Sekunjalo Investment Holdings’ chairperson Dr Iqbal Survé, members of the Black Business Council (BBC) have yet to convene to explore the possibility of rescuing Ubank.
Earlier this month, Survé pledged to BBC members that Sekunjalo would put forward R250 million, under the right conditions, towards rescuing the miners’ bank. He said his company and its subsidiaries were also prepared to move their combined revenue of just less than R10 billion, as well as its assets, to Ubank.
If 1 million South Africans contribute R250 each, the balance of the money needed to recapitalise the bank would become a reality.
“I hereby pledge R250 towards capitalising Ubank alongside Iqbal Survé. Now, can 999,999 other Black people pledge R250 each. We’ll talk logistics later. I have also pledged R250 for me personally and the business, I am also willing to move both my personal and business accounts to Ubank. I am part of the masses, count me in. He is putting his money where his mouth is. We must support,” read some tweets shared by supporters of Survé’s proposal.
Ubank, founded in 1975, is owned by Teba Fund Trust and administered by the National Union of Mineworkers (NUM). Ubank provides basic financial services to mineworkers and their families. It has more than 4.7 million accounts.
The decision of the SA Reserve Bank (SARB) to place the bank under the curatorship of KPMG, came after the Prudential Authority (PA) determined that the bank had run out of capital, putting its clients’ money in jeopardy.
The duration of Ubank’s stay under curatorship will be determined by KPMG, which is conducting assessments and analyses of the banks’ financial condition. The bank is said to have been unable to timely raise the additional shareholder funding capital needed to restore its regulatory capital adequacy requirements.
SARB governor Lesetja Kganyago said that the financial institution was being placed under curatorship to mitigate the adverse consequences on depositors and preserve the stability of the South African banking and financial services sector. Kganyago also believed that the Ubank situation was “strange” because ordinarily when a bank faces a crisis, it usually has enough capital but has a liquidity challenge.
“Here we have a situation where there is enough liquidity that the depositor base is stable and there is enough liquidity to meet that growth [depositor based growth] in the short run. The problem here is that this is a bank that has eroded capital,” he said.
The net asset value of the bank is around R208-million whereas at the very minimum it should be at R215m, Kganyago said.
How long the curatorship process will take depends on “how deep the hole is” but in this case, there are interested parties, that the Prudential Authority is aware of, who are in discussions to invest in Ubank. If the discussions are concluded, the issues at Ubank will be resolved, Kganyago said.
If the Prudential Authority is in discussion with “interested parties” willing to invest in Ubank and these “interested parties” exclude Sekunjalo, who are these interested parties and why is this not common knowledge? Why was this detail neither revealed earlier nor widely distributed?
Amcu president Joseph Mathunjwa said Ubank was the victim of white monopoly, including the financial sector, which he said had influenced the SARB against financing the bank. “We are concerned about the power of these multinational companies over South Africa as they are destroying the social wage, they destroy everything that benefits the poorest of the poor.”
In an interview with Independent Media, BBC vice president Yvonne Maitin, who is also the chief executive of One Africa Capital Partners, said black businesses needed a bank that would look out for their specific interests because any attempt to transform current traditional banks had failed.
Maitin said after Survé’s announcement that several BBC members approached her with keen interest. “They approached me just to find out more information and indicated that they were very interested in exploring this opportunity.”
Maitin said, however, that it was still early days to conclude whether or not Survé’s offer would receive practical support, as due diligence would still need to be done, including consulting the BBC members.
The BBC, one would assume, would rally behind Maitin, and rejoice at the chance to make their vision of being part of a black bank a reality. The BBC appears to be slow at information-gathering and planning to rescue the bank via Survé’s proposal.
“So, I’d want to leave you with this opportunity and challenge, and I’d like to promise on behalf of Sekunjalo that we’re ready to work with you as entrepreneurs, company owners, and professionals to recapitalise Ubank. I’m announcing right up front that we’re ready to provide R250 million to the capitalisation of Ubank right now, subject to certain circumstances,” Survé said.
Survé also said Sekunjalo does not want to take control of Ubank, but it wants to collaborate with black partners and entities to make sure Ubank succeeds. “Together, we can make Ubank a successful bank. We are prepared to take our revenue of just under R10 billion, across to Ubank.”
