NUM shocked at Ubank move
Reserve Bank says bank depositors’ money is safe
The National Union of Mineworkers (NUM), one of Ubank's major shareholders, said it was shocked and surprised by the Reserve Bank move to put Ubank under curatorship.
“This happened despite the Ubank’s board commitment last night that it would raise the required R800m to save the bank from being placed under curatorship,” said NUM's general secretary William Mabapa.
“We were called last night [Sunday] by the Prudential Authority [PA] advising that we should raise R800m. Of course that money was successfully raised within 24 hours. We are wondering why the PA decided to advise the Reserve Bank to take such a drastic decision,” he said.
“The Ubank board managed to raise the required money and the NUM is shocked by this latest development.”
Reserve Bank governor Lesetja Kganyago said yesterday Ubank was being placed under curatorship because it has run out of capital and there were corporate governance concerns. Kganyago, however, emphasised that the bank was liquid and clients could withdraw their deposits.
This action, however, has not sat well with the Association of Mineworkers and Construction Union (Amcu), with its president Joseph Mathunjwa saying while it embraces good corporate governance in the financial sector, it was concerned by the Reserve Bank’s move.
“We see every financial institution that is run by blacks is being targeted. Numsa [National Union of Metalworker of SA] was put under the spotlight because their monies are run by black institutions.
“As Amcu we introduced Igula Provident Fund, Anglo American fought us not to move our members to a unionestablished provident fund because we were taking food out of Old Mutual,” he said.
“Today it is Ubank, run by blacks. What does it tell you? We are at that time in SA whereby anything that is run by a black person is looked down upon and positioned in the media as corrupt.”
He said that workers who were paid their wages through Ubank will simply be handed over to a “white monopoly capital” bank and things will continue as if nothing had happened.
“These companies are uncles. They will try to minimise the impact… just to look down at any institution that is run by blacks. It is pure economic power that is at play,” he said.
Kganyago said the bank has been going through challenges.
“During the last couple of years the Prudential Authority has intensified its supervision of Ubank due to… corporate governance concerns, secondly, a high number of internal controls weaknesses, and thirdly the prolonged period it has taken to ensure the injection of sufficient capital to comply with minimum capital requirements, diversify the bank’s business model and ensure the future sustainability of the bank,” Kganyago said.
Ubank largely operates in mining towns providing banking services to mineworkers and their families.
Kganyago said placing Ubank under curatorship was a proactive step to prevent adverse consequences to Ubank’s depositors while also preserving the stability of SA’s banking and financial services sector.
KPMG SA has been appointed as a curator, with its director Zola Beseti as the accounting and auditing firm’s representative. Beseti’s first port of call will be to recover and take possession of all the assets of Ubank.
Kganyago said Ubank will continue to operate during the period of curatorship. He said retail depositors represent 98% of Ubank’s total liabilities.