UBank looks to widen client base
NUM opposes proposals sell the lender
UBANK, a South African black-owned commercial bank focused on providing savings accounts and loans predominantly to mineworkers and rural communities, is diversifying its client base.
The 40-year-old bank, whose clients are 90 percent miners in the gold and platinum sector, is aiming to broaden its customer base in the next 10 years as metal price volatility and low consumer confidence takes its toll on the industry. It is also haunted by the five-month platinum belt strike in 2014, which had a material effect on profitability due to increased impairments and lower income-generating activities.
UBank spokeswoman Mpho Ramosili said over the next 10 years the bank aimed to broaden its customer base and extend its services to the wider South African workforce and the sub-Saharan regional markets.
“As part of our growth strategy, we also aim to provide our products, services and access to financial solutions to other mining sectors such as coal, iron, etc,” Ramosili said.
Capitalisation
UBank previously said it had submitted its recapitalisation plans to the SA Reserve Bank. It said last week that it was currently awaiting feedback from its shareholder, the National Union of Mineworkers (NUM), regarding the capitalisation process.
“At this stage, the bank cannot speculate as to how the capitalisation programme will conclude save to say that the bank has made significant progress. The board has confidence on how this process has been managed thus far,” Ramosili said.
David Sipunzi, the NUM general secretary, confirmed that the capitalisation programme was a work in progress.
“We need the recapitalisation of the bank to take place as soon as possible. If we do nothing, we may find that we have not met the Reserve Bank’s additional capital requirements.”
‘We aim to provide our products, services and access to financial solutions to other mining sectors such as coal, iron…’
Sipunzi said the NUM was opposed to plans to sell the bank. “The chief executive is driving the sale of the bank. We have asked the Reserve Bank to help us to avoid the sale of the bank. UBank is the only black-owned commercial bank,” he said.
Sipunzi was concerned UBank’s chief executive Luthando Vutula was planning to sell the bank.
“They (UBank) have availed themselves to a bidder. As a union we do not agree on the terms of the bidder.”
Ramosili declined to comment on the bidding, saying that the company was in a closed period.
In June it was reported that the politically-connected Gupta family had made plans to buy the bank.