Shareholders in an ordinary company can sell when they lose patience. The South African Reserve Bank cannot. It has owned 45% of African Bank since rescuing what was salvageable from the lender's collapsed predecessor in 2014, and the only way out is a listing promised for 2025, then 2028, now 2030. On Friday the executive who used to explain that timetable resigned with immediate effect.
Anbann Chetti had been group chief financial officer since August 2023. African Bank told noteholders on 11 September he was leaving to pursue other opportunities, standing down the same day from three boards and five sub-committees. Given Bhutana Mabena, who joined from Absa this year to run unsecured lending, takes over in an acting capacity subject to regulatory approval. The announcement gives no other reason.
The six months before he left
Chetti is the second executive to go this way in six months. Chief executive Kennedy Bungane went in March, after a strategy that turned African Bank from a one-product lender into a full-service one by buying Ubank, Grindrod Bank and parts of Sasfin, the cost of which management now blames for earnings that have not arrived.
The half to March was the worst of it. African Bank lost R624 million after tax, and the share of its lending going bad rose by close to half, to 7.7%. Running costs now swallow 70 cents of every rand the bank earns. In July it said it was weighing retrenchments covering about 1,200 people and 90 branches.
The loan the bank made to itself
Between the two resignations came a ruling most banks would rather avoid. Short of capital in January 2025, African Bank lent R725 million to a sister company, African Insurance Group. The insurer declared a R685 million special dividend up to the parent, which used the cash to buy a single new share in African Bank at the same price. On paper the bank had been recapitalised. In practice the money had gone out one door and come back in another.
The Financial Services Tribunal, ruling on 9 April, likened it to kite-flying: banking a cheque drawn on an underfunded account and drawing the money before it bounced. The Prudential Authority, part of the Reserve Bank, had already ordered it reversed: the cash was not real loss-absorbing capital. African Bank appealed, lost, and complied. The committee that authorised the loan had Chetti on it, alongside chairman Thabo Dloti.
The listing needs three solid years, not a new finance chief. Zweli Manyathi, who replaced Bungane in March and was confirmed in August, said in June the board has not changed its mind about listing, and that the date depends on three years of delivery. Until those years exist the Reserve Bank's 45% stays put, alongside the Government Employees Pension Fund's 22.5%, six commercial banks with another 22.5% and a staff trust holding the last tenth. African Bank has already told the market the rest of this financial year, which closes this month, will be hard.
