Who bailed the bank out

CityPress - - Business -

The con­sor­tium which has raised R10 bil­lion to save African Bank is made up of Absa, In­vestec Bank, Ned­bank, Stan­dard Bank, Capitec, First Rand and the Pub­lic In­vest­ment Cor­po­ra­tion (PIC).

One of the con­sor­tium mem­bers, who spoke on con­di­tion of anonymity, said they were asked by the Re­serve Bank to un­der­write the re­cap­i­tal­i­sa­tion of the “good new Abil” – as Abil has been split into a “good” and “bad” bank.

“The de­tails of the split of the un­der­writ­ing have yet to be made pub­lic,” he said.

“We have be­come part of the con­sor­tium to pro­vide as­sis­tance to the [Re­serve Bank] to main­tain a sta­ble bank­ing sec­tor, not for a long-term share­hold­ing in a com­peti­tor. That is not our goal.” The PIC was one of Abil’s largest share­hold­ers. Absa’s Money Mar­ket Fund, worth a to­tal R51.6 bil­lion by June 30, had the high­est ex­po­sure to African Bank in­stru­ments at R1.8 bil­lion. Rat­ings agency Fitch Rat­ings down­graded the fund four notches to A (Zaf) on Wed­nes­day, cit­ing its high ex­po­sure, as well as the length of this ex­po­sure, to Abil debt.

Also by June 30, var­i­ous re­tail funds in In­vestec As­set Man­age­ment were ex­posed to Abil debt to the tune of R443.1 mil­lion. Fitch placed one of them on “rat­ing watch neg­a­tive”, along with another fund, the In­vestec Money Mar­ket Fund, which did not have sub­stan­tial Abil hold­ings by June.

But In­vestec As­set Man­age­ment’s Kotie Bas­son said it op­er­ated “en­tirely in­de­pen­dently” of In­vestec Bank.

“We there­fore can­not com­ment on the ra­tio­nale for do­ing so,” she said.

Ned­bank’s Ned­group In­vest­ments Core In­come Fund and Money Mar­ket Fund col­lec­tively held R875.6 mil­lion in Abil in­stru­ments by June. Both were also placed on a neg­a­tive rat­ings watch by Fitch, along with Stan­lib’s Ex­tra In­come Fund, which had a R351.8 mil­lion ex­po­sure to Abil by June.

But cu­ra­tor Tom Win­ter­boer down­played most of the con­sor­tium’s ex­po­sure to Abil in­stru­ments.

“It’s not specif­i­cally about In­vestec, it’s not specif­i­cally about Ned­bank at this stage,” he said.

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