KPMG appointed to oversee operations at embattled Ubank
Ubank, which mainly targets lower-income blue-collar workers in the mining industry, has been placed under curatorship amid some challenges.
The decision takes effect immediately.
Reserve Bank Governor Lesetja Kganyago made the announcement on Monday.
It's understood the bank has been on the central bank's radar for some time.
"During the last couple of years, the Prudential Authority has intensified its supervision of Ubank due to corporate governance concerns, a high number of internal control weaknesses, and the prolonged period it has taken to secure the injection of sufficient capital to comply with the minimum capital requirements; diversify the bank's business model; and ensure the future sustainability of the bank.
"After having duly considered the seriousness of the issues facing the bank and given that Ubank is unlikely to immediately meet its obligations as required by the Banks Act and the Regulations relating to Banks, the Minister of Finance, in consultation with the Prudential Authority, has decided to place Ubank under curatorship with immediate effect.
"This is being done to proactively mitigate the adverse consequences on Ubank's depositors, and to preserve the stability of the South African banking and financial services sector as a whole," Kganyago added.
The bank's capital adequacy is around 3%, far below the average 20%.
This while its total assets stand at R5.2 billion as of February.
"The Minister of Finance has appointed KPMG South Africa as the curator, with Mr Zola Beseti as the representative. KPMG South Africa will be responsible for Ubank with immediate effect, and with the full authority the law confers on the curator."
Kganyago added Ubank will continue to service its 4.7 million accounts while KPMG works to turn the business around.
"Ubank remains highly liquid with a liquidity coverage ratio in excess of the regulatory requirement. The Prudential Authority is aware of interested parties that have been discussing, and are continuing to discuss, investing in Ubank, and which investments, if concluded, will resolve the issues at Ubank. The curator will take this process forward.
"Depositors will have continued access to their money and other banking services offered by the bank in the ordinary course of business."
Ubank will now be the only bank in the country under curatorship.ALSO READ:
