South Africa places Ubank under administration

Finance Minister Enoch Godongwana appointed KPMG South Africa as curator of the bank because of concerns about the lender’s corporate governance, a high number of internal-control weaknesses, and a lack of sufficient capital to ensure the viability of the bank, central bank Governor Lesetja Kganyago told reporters Monday in an online briefing.

Ubank was created more than four decades ago to serve as a savings fund for mine workers. It converted to a commercial bank in the early 1990s and is now owned by a trust that is managed by trustees elected by entities including the National Union of Mineworkers and the Minerals Council South Africa, according to its website.

“We were called last night by the Prudential Authority advising that we should raise 800 million rand,” Mabapa said in a statement. “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.” At the time of its collapse, VBS was the seventh-smallest of South Africa’s 21 banks. The bank is now in liquidation, Kganyago said at the briefing.

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