The Public Investment Corporation (PIC) vowed on Monday that it would assist VBS Mutual Bank to survive its current crisis.
On Sunday, the VBS Mutual Bank was placed by the Registrar of Banks under curatorship.
South Africa’s Reserve Bank Governor Lesetja Kganyago told a televised news conference on Sunday that VBS Mutual Bank has been placed under curatorship because of liquidity issues.
PIC is Africa’s biggest investment fund and one of the biggest shareholders of VBS Mutual Bank.
“The PIC has noted the decision of the South African Reserve Bank to place VBS Mutual Bank under curatorship after it experienced liquidity challenges,” said Deon Botha, PIC’s head of corporate affairs.
The PIC, on behalf of the Government Employees Pension Fund, is one of the shareholders in VBS, holding about 27% equity interest of the VBS Mutual Bank.
“The PIC will work closely with the appointed curator, Sizwe NtsalubaGobodo, and all other stakeholders, to assist the bank to navigate through this difficult situation and hopefully emerge much stronger,” said Botha.
VBS Mutual Bank became popular after it granted former President Jacob Zuma a loan to finance the R7.8 million he owed relating to the upgrades of his private residence in Nkandla.
The VBS Mutual Bank received a permanent Mutual Bank License on 11 October 2000.
VBS has its roots in a 1980s building society based in Venda, a rural area given a degree of autonomy by the apartheid government before 1994. It has 30 000 clients with deposits of around R800 million.