Reserve Bank begins selling African Bank shares

FILE image of a branch of African Bank in Cape Town August 8, 2014. Investors fled African Bank Investments on Thursday, as the South African lender faced a $790 million hole from a flood of unsecured loans gone bad.

File: The central bank bailed out African Bank after it nearly collapsed in 2014 with many low-income clients struggling to pay back loans.

Reuters

JOHANNESBURG - The South African Reserve Bank has set the ball rolling in its move to sell its 50 percent stake in African Bank.

It has issued a request to appoint an advisor to deal with the transaction.

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The central bank bailed out African Bank after it nearly collapsed in 2014 with many low-income clients struggling to pay back loans.

It injected R5-billion in exchange for the lender's bad loan portfolio and a 50 percent stake.

The Reserve Bank says it was never its intention to hold on to the equity, as the shareholding creates a potential conflict of interest.

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eNCA