South African authorities have placed Ubank under administration citing concerns related to the bank’s financial metrics and governance. 

The Minister of Finance has appointed KPMG South Africa as the curator, South African Reserve Bank governor Lesetja Kganyago said in a press conference. 

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Ubank is focused on providing financial services to mineworkers and their families. Retail depositors make up 98% of the bank’s total liabilities. 

Kganyago said: “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.”

The bank is unlikely to immediately meet its obligations therefore it was placed under administration with “immediate effect”, the governor added. 

KPMG director and policy board member Zola Beseti will act as the representative. 

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The move seeks to safeguard Ubank’s depositors along with the South African banking and financial services sector.

Kganyago stated that the regulator is aware of the investors’ interest in Ubank, which could resolve its issues, and this process will be carried out by the curator.

The governor assured that Ubank has a strong liquidity position, and it will continue offering banking services to customers.

Ubank has been operational for over 40 decades and is owned by a trust that is managed by trustees elected by the entities including the National Union of Mineworkers (NUM) and the Minerals Council South Africa.