THE Minerals Council South Africa said it supported the decision by the country’s Reserve Bank to place Ubank under curatorship as efforts by the bank’s board and trustees to find a strategic investor failed last year.
Ubank predominantly services mineworkers in South Africa’s gold and platinum group metal mining communities. It is owned by the Teba Fund Trust, a services company that provides health assistance and tracks beneficiaries of mining funds.
The fund is jointly administrated by the council and the National Union of Mineworkers (NUM) which each provide three trustees to Ubank’s board. The Minerals Council said that efforts to attract an investor collapsed through “no fault of the trustees”.
The Reserve Bank Prudential Authority subsequently found that the bank’s capital adequacy ratio – capital available as a percentage of its credit exposures – fell below the prescribed regulatory level. This was owing to a combination of Ubank’s narrow client base and the Covid-19 pandemic, the council said.
The NUM expressed shock earlier this week at the Reserve Bank’s decision to put Ubank under curatorship.
“We had a meeting on the night before with the Prudential Authority and they were assured and given tangible evidence that the R800m that they wanted to not place the bank under curatorship has been found,” said the union’s spokesperson, Livhuwani Mammburu.
Said the council: “It is important to reiterate that as stated by the Governor of the Reserve Bank. Lesetja Kganyago, on 16 May, Ubank continues to operate on a liquid basis, and it has sufficient reserves to meet all liabilities”.
“While it was disappointing that the Trust and Board of Ubank were not successful in the recapitalisation process, the curatorship process will help stabilise the bank, protect depositors, and bring in a long-term strategic investor,” it said.