BL Premium reports that the regulator of financial services, the Prudential Authority (PA), has announced that Ubank has been placed under curatorship for failing to maintain adequate capital levels, as required by the Banks Act.

Ubank, which was formerly known as Teba Bank and traditionally serves customers in rural areas and mining communities, has a capital adequacy ratio of about 3% compared with an industry average in SA of just more than 15%, Reserve Bank governor Leseta Kganyago indicated on Monday. KPMG has been appointed curator under the supervision of the PA, with the firm’s representative during the process being Zola Beseti. Retail depositors, who represent about 98% of Ubank’s total liabilities, will continue to have access to their money and banking services. Ubank will also continue to operate during the curatorship process, though the curator will have to make a decision on whether it will continue granting loans. Ubank has been providing basic financial services to mineworkers since the mid-1970s, a time when SA’s mainstream financial institutions largely ignored that segment of the market. Ubank’s total assets as of February 2022 were estimated at R5.23bn, while its net asset value was about R208m. Kganyago said the length of the curatorship process would depend on “how deep the hole” at Ubank, which has more than 4.7-million accounts, was.

• Read the full original of the report in the above regard by Garth Theunissen at BusinessLive (subscriber access only)

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