SA’s sixth-largest retail bank by customers, African Bank, says 8%, or 32, of its branches were hit by looting and social unrest last week, with the group still counting the costs and assessing when it can reopen them.
Of the 32 damaged branches, 17 are situated in shopping centres in KwaZulu-Natal and 15 are in the townships and surrounding areas of Gauteng, the group said.
While no staff were directly affected, the damage to infrastructure was “extensive”.
African Bank does not have an ATM network and so relies on other banking networks, many of which have been damaged. The bank does, however, have partnerships with various retailers where cash can be withdrawn or deposited by customers.
The Banking Association SA (Basa) said on Friday that more than 1,400 ATMs were vandalised last week, with unrest also affecting more than 300 bank branches and post offices. Banks were compelled to close more than 1,300 branches between July 12 and July 14, Basa said.
Some of the closed branches will take some time to restore, but “no employee retrenchments are anticipated”, said African Bank's channel executive Shannon Timothy said.
He added that “redeployment and cross-skilling opportunities are currently being considered for these employees”.
“Many of our customers fortunately had already moved over to online banking as a result of the pandemic so they experienced little disruption,” said Timothy.
African Bank is the entity that arose from one of SA’s biggest banking collapses, formed in 2016 with a R10bn injection from the Reserve Bank, the Public Investment Corporation, and a number of other SA banks, which followed African Bank Investments’ collapse under a mountain of bad debt in 2014.
It recently reported it was showing signs of recovery, after Covid-19 tore into banker’s profits and forced them to set aside billions of rand to cover bad debts as SA’s economy deteriorated.
The bank swung from an interim loss of R158m in 2020 to a net profit after tax of R152m for the six months ending March, as bad debt expenses fell by more than half.
African Bank has moved to tighten its lending criteria, while it also reduced its staff by 429 (about 11.5%), through voluntary severance and early retirement packages.
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