African Bank CEO Kennedy Bungane was pushed out at a highly charged directors’ affairs and governance committee meeting last week, at which the group’s poor first-quarter performance and a regulatory reporting mistake to the Prudential Authority (PA) were used to force his hand.
Business Day has it on good authority that the bank had a poor showing in the first quarter of its financial year (October-November 2025). While this is seasonally a poor period for the lender, the quarter under review was considerably worse.
Despite having taken aggressive steps to diversify the business, much of the group still comprises unsecured lending, which exposes it to heightened impairments before the festive season, when consumers default on loans.
The group’s financial year ends in September.
Another area that caused the board to seek Bungane’s ouster was errors in the group’s regulatory reporting to the PA in a new regulatory regime. The regulatory reporting issue arises from the implementation of Basel III+ rules last year, driven by the PA, aiming to improve transparency on risk, leverage, and capital adequacy.
One of the reporting changes was new definitions for cured assets and impaired assets. Before this, banks reported on their gross assets and by how much assets were impaired.
African Bank was one of the first banks to feature annual financial reporting in September 2025 based on the newly applied Basel 3.1 regulatory parameters.
Errors in the new Bankers’ Acceptance returns upset the PA, causing questions to be asked about the credibility of African Bank’s regulatory data and reporting.
Banks’ Bankers’ Acceptance returns in South Africa are mandatory monthly regulatory, financial, and risk reports submitted by the country’s lenders.
The PA alerted African Bank to the errors in January. The lender has since resubmitted these reports to the PA with the assistance of an external audit firm.
This and the group’s poor first-quarter performance caused Bungane to draft a remediation and turnaround strategy plan to address the first-quarter performance and improve reporting to the PA. This plan, submitted to the board on February 27, was approved.
However, in a meeting last Tuesday the directors’ affairs and governance committee, delegated by the board, dismissed Bungane and agreed to enter into a mutual separation with him to avoid harming the company’s reputation and Bungane’s “dignity”.
This was after the board deemed Bungane unfit for purpose to lead the turnaround strategy. Board chair Thabo Dloti chairs African Bank’s directors’ affairs and governance committee.
Dloti, in his letter to Bungane, ordered him to immediately take garden leave.
Business Day was also told that the board was uneasy with a conflict of interest allegation against Bungane regarding the bank’s dealings with his spouse and business entities linked to his adult children.
This newspaper has confirmed that the bank granted credit facilities to Bungane’s wife, who operates several fuel service stations. These and the credit facilities extended to his children were declared.
Dloti’s letter to Bungane does not refer to a conflict of interest as a reason for the termination of his contract.
Executives sympathetic to Bungane who spoke to Business Day on condition of anonymity said it is unfair that he had to fall on his sword over poor performance in a quarter that has traditionally been tough for banks. They also said that if the PA regulatory reporting error was a key issue in his ousting, the group CFO and chief of compliance should have been ousted too.
In its public communication on Friday, the group hailed Bungane’s tenure, thanking him for his “significant contribution in the crafting and implementation of the Excelerate Strategy, which aimed to transform the bank from a monoline unsecured lender into a customer-centric, data- and digitally enabled, diversified, sustainable, and scalable personal and business bank”.
However, it was part of a carefully crafted public communication strategy to mask the real reasons behind Bungane’s firing.
The group on Friday appointed its head of business banking, Zweli Manyathi, as interim CEO — the group’s fourth CEO in eight years under the Dloti-led board.
“The board is committed to a smooth transition, and we are confident that Zweli provides a safe and skilled pair of hands, with the rest of the executive team, to steer the group to continue its transformation to a diversified, fully fledged financial institution that services both personal and business customers,” Dloti said in a statement.
“We thank him for taking up the role as well as the rest of the capable executive team.”
The appointment of Manyathi, who is reaching the group’s retirement age of 65 in August, means the lender is on course for its fifth CEO, whether in a permanent or acting capacity, in less than 10 years.
The group’s erstwhile CEO, Basani Maluleke, also left under a cloud in 2021, following what Business Day reported at the time were personality clashes with Dloti.
Maluleke went on to become CEO of South Africa’s largest personal banking franchise, Capitec.
The leadership instability comes while the bank is planning to list on the JSE. Under Bungane, the lender grew its customer base from 1.3-million to 6.3-million, and its gross loans and advances from R26.7bn to R44bn.
The group has a branch network of more than 400 outlets.
The company has also been on an aggressive acquisition spree in the past five years, buying Eskom’s home loan book business, and the commercial equipment finance and commercial property finance units of Grindrod Bank and Sasfin Bank.
In 2025 the lender prioritised improvements to its credit scoring models, risk pricing, capital allocation, and optimal allocation strategies that are critical to safeguarding the group’s financial health.
Bungane declined to comment.
The South African Reserve Bank holds a majority stake in African Bank after placing it in curatorship in 2014.
The Government Employees Pension Fund (GEPF) owns about 22%, while a consortium of five South African banks holds about 25% on a pro-rata basis.
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