Business Report writes that the sale of Ubank, the mineworkers’ bank that is SA’s solely black-owned private bank, to African Bank may come as a huge blow to attempts to transform the country’s banking sector.

African Bank, whose shareholders include large commercial banks, recently revealed that it was a successful bidder to acquire part of the Ubank, which has been under curatorship since May this year. African Bank would pay R80 million to buy the assets of the mineworkers’ bank. Earlier this year, the SA Reserve Bank (SARB) announced that it would soon be selling sell its 50% shareholding in African Bank to avoid a conflict of interest as the SARB, as the regulator, could not be both a referee and a player. The SARB acquired this share after African Bank was placed under curatorship in 2014. Recently there has been growing concern about black people being deprived of ownership in the financial sector. This is because all major banks are largely white-owned. The history of Ubank reflects that it was established to counter the reluctance of major banks to accommodate mineworkers. In the early 1990s, the Godsell Motlatsi Commission led to the commercialisation of the institution, which was granted a banking licence in June 2000 under the name Teba Bank, with the National Union of Mineworkers (NUM) and the Chamber of Mines of SA being the trustees. In 2010 it was renamed Ubank. SA Reserve Bank (SARB) governor Lesetja Kganyago recently told Parliament’s standing committee on finance that the central bank would not take part in financially rescuing Ubank or Ithala. Kganyago was responding to a question posed by committee chairperson Joseph Maswanganyi about the plight of the two black-owned banks and transformation in the financial sector. Kganyago said SARB’s intervention into the bank’s affairs was, according to the law, limited to protecting depositors’ interests. “We do not have the regulatory strategy that says we have got to prevent banks from failing because we do not have the ability to prevent them from failing,” he pointed out. Kganyago said “banks can fail” and, if that happened, the SARB had a responsibility to make sure that they did not take with them the assets of the depositors “meaning that the depositors’ interest must be protected”.

• Read the full original of the report in the above regard by Bongani Hans at Business Report

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