The SA Reserve Bank wants to sell its stake in African Bank in a year or two, moving a step closer to bringing the lender back into private ownership after being rescued from collapse under a wave of unpaid consumer loans. A Business Day report notes African Bank nearly collapsed in 2014 after its mainstay low-income clients struggled to pay back personal loans amid a slowing economy and job losses, prompting the Reserve Bank to step in with a bailout package. As part of the bailout plan, the central bank injected R7bn into African Bank in exchange for the lender’s bad loan portfolio and a 50% stake. A group of lenders that included Investec – as well as the Government Employees Pension Fund (GEPF) – underwrote a R10bn capital raising in exchange for the remaining stake in African Bank. The GEPF owns 25% and the banks’ consortium holds the remaining 25%. The Reserve Bank would only sell its holding if it was convinced that African Bank was financially sound and there was appetite among investors, Deputy Governor Kuben Naidoo said. ‘As a central bank, it is not in our intention to hold ownership of this bank over a long time. We see it as a transitional arrangement,’ he said. It is unclear how much the stake could fetch, but the holding is unlikely to have a shortage of buyers as it has been growing net profits every year since emerging out of a curatorship, while also aggressively building up retail deposits to cut its dependence on personal loans. It has also been collecting large volumes of debt it had written off, which boosted its balance sheet, notes the report.