South Africa Places Mining Workers’ Bank Under Administration

(Bloomberg) -- South Africa placed Ubank Ltd., a lender partly managed by mine workers, under administration.

Finance Minister Enoch Godongwana appointed KPMG South Africa as curator of the bank because of concerns about the lender’s corporate governance, a high number of internal-control weaknesses, and a lack of sufficient capital to ensure the viability of the bank, central bank Governor Lesetja Kganyago told reporters Monday in an online briefing.

“KPMG will be responsible for Ubank with immediate effect,” Kganyago said. “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,” he said.

Ubank was created more than four decades ago to serve as a savings fund for mine workers. It converted to a commercial bank in the early 1990s and is now owned by a trust that is managed by trustees elected by entities including the National Union of Mineworkers and the Minerals Council of South Africa lobby group, according to its website.

Read: REMARKS BY SOUTH AFRICAN RESERVE GOVERNOR ON UBANK CURATORSHIP

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