VBS Mutual Bank

VBS Mutual Bank
Public
Industry Banking
Founded 1982 (1982)
Headquarters Rivonia, Johannesburg, South Africa
Area served
 Limpopo, South Africa
Key people
Products Private Banking
Consumer Banking
Revenue R47 million (2016)[1]
R4.7 million (2016)[1]
Total assets R1,018,036,301 (2016)[1]
Total equity R144 million (2016)[1]
Number of employees
 87 (2016)[1]
Website vbsmutualbank.co.za

VBS Mutual Bank is a South African mutual bank. It was formed as Venda Building Society in 1982, and became a mutual bank in 1992.[2] By 2016 the bank reportedly had around 30,000 depositors with all deposits in the bank totalling R800 million. In 2017 the bank listed on the South African Stock Exchange. [3] Most of its branches and clients are located in Limpopo province.

History

Prior to 2014 the bank was relatively small and primarily involved in retail banking with many of its depositors consisting of burial societies and stokvels. The bank in turn issued mortgages and short term loans to its clients allowing them to use their property or banking deposits as collateral.[4] The South African Public Investment Corporation inherited its shares in VBS bank when it succeeded the pension fund of the Venda bantustan government[4] thereby giving it a 25% ownership stake in the bank.[5] Largest shareholder in the bank was the Venda royal family which owned 51% of the bank.[4]

Prior to coming under curatorship in 2018 the bank gain notoriety in 2016 when it gave a R7.8 million loan to then President Jacob Zuma when he was ordered to repay the state for controversial improvements to his personal homestead at Nkandla.[6]

Curatorship

Following liquidity problems, VBS Bank was placed under curatorship on 11 March 2018 in terms of the South African Banks Act, Act 94 of 1990, by the South African Reserve Bank (SARB). A report released by the SARB in October found evidence of wide-scale looting, fraud and corruption, and recommended that bank leadership, public officials and auditors be criminally charged and held liable in civil proceedings.[7] The report found that R1,894,923,674 (US$ 130 million) was transferred from the Bank to fifty three individuals between 15 March 2015 and 17 June 2018.[4] According to the report, R16,148,569[8] (US$1.09 million) of that money went to Brian Shivambu, younger brother of the Economic Freedom Fighter senior politician Floyd Shivambu.[9][10] The report also implicated the African National Congress's deputy chairperson for Limpopo, Florence Radzilani, and treasurer, Danny Msiza.[11]

References

  1. 1 2 3 4 5 "VBS Mutual Bank Annual Report 2016" (PDF). VBS Mutual Bank. 2016. Retrieved 12 October 2018.
  2. ↑ Masondo, Sipho (23 September 2016). "What is VBS Mutual Bank? Everything you need to know". City Press.
  3. ↑ "VBS Mutual Bank, which lent Jacob Zuma R7.8m, will list on the JSE". Business Day. 2 February 2017. Retrieved 12 October 2018.
  4. 1 2 3 4 Motau, Terry (10 October 2018). "The Great Bank Heist: Investigator's Report to the Prudential Authority" (PDF). South African Reserve Bank. p. 19, 134. Retrieved 11 October 2018.
  5. ↑ "VBS Mutual Bank, which lent Jacob Zuma R7.8m, will list on the JSE". Business Day. 2 February 2017. Retrieved 2018-10-12.
  6. ↑ "VBS Mutual Bank explains how 74-year old Zuma can afford R7.8m home loan". 14 September 2016. Retrieved 2018-10-12.
  7. ↑ Cowan, Kyle (10 October 2018). "Explosive report into VBS Mutual Bank reveals large-scale 'looting'". News24.
  8. ↑ Motau, Terry (10 October 2018). "The Great Bank Heist: Investigator's Report to the Prudential Authority" (PDF). South African Reserve Bank. p. 135. Retrieved 11 October 2018.
  9. ↑ Wyk, Marianne Thamm and Pauli Van. "Analysis: Old scores, new threats – what is really behind the EFF's anti-Indian rhetoric". Daily Maverick. Retrieved 2018-10-11.
  10. ↑ Van Wyk, Pauli (11 October 2018). "The Shivambu Brothers and the Great VBS Heist". Daily Maverick. Retrieved 2018-10-11.
  11. ↑ Madia, Tshidi (11 October 2018). "ANC Limpopo to hold emergency meeting over VBS". News24.
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