Ubank stops lending to mineworkers
UBANK, formerly Teba Bank, is reeling from the effects of the 13week strike in the platinum-mining sector.
It is estimated that more than twothirds of the bank’s customers are mineworkers — and most are members of the largest union in platinum mining, the Association of Mineworkers and Construction Union (Amcu), which is at loggerheads with mining houses.
The bank’s CEO, Luthando Vutula, summed up what is happening to his company as “not good”.
He said the longer the strike continued, “the more it is hurting our business and our customers”.
Ubank’s platinum miner customers have had no income for two months, so most of them have been unable to service their loans.
Vutula can only hope that the strike is resolved soon.
There have been reports of Amcu claiming that Ubank is a National Union of Mineworkers (NUM) business.
This rumour stems from the fact that one of NUM’s leaders sits on the bank’s board of trustees, according to Vutula.
He said that no bank accounts had been closed because of these reports.
The lender’s executives have met the union’s leaders to clarify the bank’s stance, and discuss the effects of the strike on its customers’ financial arrangements.
Vutula said the Amcu leadership was told that the bank serves all workers, not only NUM members.
Ubank, which has a loan book of close to R1-billion, of which 80% is loans to mineworkers, has stopped lending to mine employees who cannot meet their repayments.
The bank is also restructuring its customers’ loans. It has a R4-billion balance sheet. This pressure on Ubank customers is evident in that many of them are reportedly rejoining the NUM in the hope of being able to return to work.
Meanwhile Amcu is asking for donations for its newly formed strikerelief fund.
Vutula said he “hopes that there will not be any write-offs” as a result of the labour action. But he is aware that threats by mining houses of increased automation would result in retrenchments.
Vutula said the continuing mining strike will have serious casualties.
Despite this, Ubank is determined to be the bank of choice for mineworkers, and is determined to defend its market share.
But in recent times, Capitec has been taking many of its clients. More than 7% of Capitec’s customers are mineworkers.
Vutula said the bank would try to attract other workers, such as police officers, nurses, teachers and clerks so that it does not rely only on the mining sector.
Ubank has about 400 000 customers. The intention had been to increase this to between 1.5 million and 2 million in the next three to five years by offering home loans of not more than R500 000, vehicle finance of up to R300 000 and credit cards.
But to achieve these goals and increase its presence in Western Cape, Northern Cape and KwaZuluNatal, the niche bank needs to raise funds — R3-billion to R5-billion within the next five years.