Governor Lesetja Kganyago: Press conference on Ubank Limited

• Published date: 16 May 2022
• Publication title: South African Official News

We have called today's press conference for an announcement in connection with Ubank Limited (Ubank).

Ubank is a bank, duly registered as such in terms of the provisions of the Banks Act 94 of 1990, which means that it falls under the supervisory and regulatory ambit of the Prudential Authority. The bank has a long history of providing basic financial services to mine workers and their families.

The Financial Sector Regulation Act 9 of 2017 mandates the Prudential Authority to:

promote and enhance the safety and soundness of financial institutions that provide financial products; and

protect financial customers against the risk that that those financial institutions may fail to meet their obligations.

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 (i) comply with the minimum capital requirements; (ii) diversify the bank's business model; and (iii) 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.

Upon an appointment of a curator, the management of Ubank vests in the curator, subject to the supervision of the Prudential Authority, that any other person vested with the management of the affairs of Ubank shall be divested thereof. The curator is also required to recover and take possession of all the assets of Ubank. Furthermore, the Prudential Authority is obliged to ensure that all payment clearing and settlement obligations of Ubank will continue to be met.

The curatorship provides the legal framework within which the necessary initiatives can take place to enable an orderly resolution. 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...