Riley to revive African Bank
A NEW chief executive was on Tuesday appointed to the “good” part of African Bank in the latest development in its curatorship.
Former Wesbank CEO, Brian Riley, will lead the entity which has the good loans of African Bank – African Bank Good Bank – and which will absorb Stangen – the insurance arm of the failed African Bank Investments Limited.
Riley’s hiring also gives the “good” bank an opportunity to grow in vehicle asset financing although this type of lending is expected to be done on an unsecured basis in the short-term.
In the past, African Bank owned the commercial vehicle asset finance division‚ which is now known as SA Taxi and owned by Transaction Capital.
Riley’s appointment comes as parliament is expected to approve the Banks Act Amendment Bill‚ which curator Tom Winterboer hopes will allow him the flexibility to restructure and make an offer on repayments to creditors.
He hoped to form the good bank by the end of September‚ Winterboer said on Tuesday‚ although a listing on the JSE would probably happen only in about two years. A strategy that includes secured lending would be considered as an option for the “good” bank but that would be for Riley and his team to formulate‚ Winterboer said. The feasibility of transactional banking was being investigated.
“I think he [Riley] is well-suited for what is envisaged for the company‚” Winterboer said.
“We are looking at what the system costs are (on transactional banking). If there is a business case‚ it will be considered.”
Although Riley could broaden the scope of the good bank‚ Winterboer said unsecured lending remained central to African Bank.
Riley’s appointment comes after banking veteran and former Absa deputy chief executive, Louis von Zeuner, was appointed as chairman earlier in the year.
Patrice Rassou‚ head of equities at Sanlam Investment Management‚ said Riley was an experienced banker.
“He has been around for a long while. He has extensive experience including (in) unsecured lending at Wesbank. He definitely has much broader experience in banking.”
Riley retired from Wesbank two years’ ago after serving as chief executive for seven years.
Before Wesbank he worked in the UK for financial services companies such as Lloyds and Scottish Finance Group‚ the Provident Financial Group and Clerical Medical and General Assurance Company. — BDLive